LG Display to cut output by 10 pct in downturn

An employee of LG Electronics' home appliances store checks its LCD televisions displayed for customers at a store in Seoul April 16, 2008. REUTERS/Jo Yong-Hak

SEOUL (Reuters) - LG Display Co Ltd 034220.KS, the world's No. 2 maker of liquid crystal display (LCD) screens, said on Sunday it would cut its panel output by around 10 percent until August because of weakening global demand.

South Korea-based LG Display joins Taiwan rivals AU Optronics Corp 2409.TW and Chi Mei Optoelectronics Corp 3009.TW in the move to reduce production and ease an oversupply as market conditions deteriorate faster than expected.

“The output reduction will be around 10 percent level,” an LG Display spokesman said. “The utilization rate should rise again from September.”

The company did not give the estimated financial impact of the reduction.

Leading LCD makers have reaped strong profits in the first half but face a steep slowdown in the coming quarters as the global downturn hits demand for flat-screen TVs and personal computers.

Consumers buy smaller television sets while flat TV makers such as Sony Corp 6758.T and Samsung Electronics Co Ltd 005930.KS are in a fierce price war.

AU, the third-ranked LCD maker, said last week it was scaling back production and its capacity utilization rate would fall to around 90 percent in the current quarter. Chi Mei has also undertaken similar steps.

Kwon Young-soo, LG Display’s chief executive officer, said earlier in July that his company might cut output if the market worsened significantly.

But No. 1 LCD manufacturer Samsung on Friday ruled out a production cut, saying it had enough panel orders. Samsung and its LCD production partner Sony are top TV makers themselves, which give the LCD business a stronger client base.

Reporting by Rhee So-eui; Editing by Tomasz Janowski