* LG Display, AU and Chi Mei gain after strong Japan quake
* LG Display, AU rise on strong volume; buck weak market
* Nomura upgrades LCD sector view to neutral from bearish
* Sharp to be hit by output halt at Corning glass factory
(Adds Taiwan LCD shares, analyst comments, updates shares)
By Marie-France Han and Rhee So-eui
SEOUL, Aug 12 Shares of South Korean and
Taiwanese LCD makers jumped while Japanese rival Sharp (6753.T)
fell on Wednesday after an earthquake disrupted glass
production in Japan, stoking concerns shortages may intensify.
A shortage in glass substrates has constrained output in
the liquid crystal display (LCD) sector and pushed up panel
prices as glass suppliers have been slow to boost production
after a slump in flat panels last year.
The display industry is recovering from one of its worst
downturns as billions of dollars from China's stimulus package
and resilient North American markets help boost demand for
televisions and computers.
"Glass supply was already tight and this quake will
contribute even more to that. This is good news for LG Display
as a lead maker of LCDs," said Moon Hyun-sik, an analyst at
U.S. speciality glass maker Corning Inc (GLW.N) said on
Tuesday it has halted production of LCD glass at a factory in
Japan, warning the shutdown would result in a 5 to 10 percent
decline in the volume of glass shipments in the third quarter
from the second quarter. [ID:nN11525861]
Shares in LG Display Co Ltd (034220.KS), the world's
second-biggest LCD panel maker, rose 2.1 percent by 0330 GMT in
a broader market down .KS11 1.5 percent. LG Display is up 67
percent so far this year.
Top Taiwanese makers AU Optronics Corp (2409.TW) and Chi
Mei Optoelectronics Corp 3009.TW jumped 5.3 percent and 3.1
percent, respectively and bucked a weak broader market .TWII.
More than 78,000 shares were traded in AU, 1.3 times the
average daily volume over the past 30 days, while over 3.5
million shares changed hands in LG Display, nearly matching the
stock's average daily volume.
Shares in Sharp, Japan's only major LCD supplier, however
fell 3.5 percent as it was expected to be directly affected by
the stoppage at Corning's plant in Japan.
BULLISH SECTOR VIEW
Analysts and fund managers asid LCD shares were set to gain
further, thanks to sustained demand and deep shortages of glass
"With the glass supply disruption, we see delay in
normalisation of supply-demand at least until November," Nomura
analyst James Kim said and upgraded his view on the display
sector to "neutral" from "bearish."
Kim said output from Sharp's key eight-generation
production line would be cut by 70 percent during the outage,
"which should cut the global supply by 3 percent on a monthly
He said he would review the earnings forecasts of LG
Display, Au Optronics and Chi Mei.
The shortages could be particularly bullish news for
Taiwanese makers, many of whom currently play second fiddle to
bigger manufacturers and have suffered several straight
"There seems to be no let-up in demand for LCD panels,"
said Michael On, who manages $40 million on behalf of Beyond
"I see the glass shortage as helping LCD makers improve
their margins, which could lead to better-than-expected results
Last week, an LG Display executive told Reuters he expected
the uptrend in some PC screen prices to continue into October
as the glass shortage was expected to linger through September.
(Additional reporting by Jungyoun Park in SEOUL and Kelvin
Soh in TAIPEI; Editing by Jonathan Hopfner and Anshuman Daga)