Corning To Focus On Pricing Over Market Share In 1H 2007

Although it has not explicitly said so, leading LCD glass supplier Corning appears willing to forsake market share in the first half of this year when demand is slow, with the company instead focusing on maintaining more stable price drops in a market that is becoming more vulnerable to seasonal fluctuations.

Corning has forecast a sequential LCD glass volume drop of 15% for the first quarter of this year, with the forecast being much more conservative than the related forecasts made by some panel makers. LG.Philips LCD, for example, only expects its shipments (in terms of area) to be down a high single percentage point.

Instead, Corning will focus on trying to maintain an average selling price (ASP) drop of only 1-2% this quarter.

Corning CEO Wendell Weeks admitted during the company’s recent investor conference that the pricing strategy may lead to the bulk of seasonality falling on Corning’s shoulders (which can be interpreted as meaning that the company may lose market share) while its competitors run relatively close to full capacity during the first half of the year, but Weeks remains confident that when demand picks up in the second half, Corning’s volumes will pick up as well and the company will be able to run with the market. Weeks added that Corning would not chase market share quarter to quarter.

The company has forecast that 60% of demand this year will come in the second half of the year.

However, with Corning trying to have lower price declines in 2007 than it did in 2006, it faces the possibility of losing market share for the year. While admitting that its strategy relies on how right it forecasts the market for the year and how right it is on estimating pricing, Corning pointed out that the glass industry is not putting into place enough capacity to take a significant bite out of its share, and supply will be tight in the second half of the year.

When asked about market share for the year, newly appointed Corning Display Technologies Taiwan president Alan Eusden stated that Corning’s shipment growth this year should be in line with growth for the overall industry – meaning the company should maintain its market share for the year.

Read the entire news on the source link below. 

Corning is attempting to avoid a repeat of last year, when its shipments actually increased about 15% during the first quarter low-season, amid panel makers’ over-optimism for the LCD TV market. The end result was increased inventories throughout the LCD supply chain, and utilization cuts in May. The industry did not recover until well into the third quarter, and Corning ended up seeing price declines of 4-5% per quarter.

According to Corning CFO Jim Flaws, more than one-third of the total LCD glass manufactured last year, measured in square footage, was used to produce LCD TVs and that ratio will approach 50% this year. But with TV demand being much more seasonal than other applications, industry players need to effectively manage their capacity in the future. By implementing its new pricing strategy, Corning has laid out how it plans to operate in a market that is going to be so seasonal, Weeks indicated.

600450 Corning To Focus On Pricing Over Market Share In 1H 2007
Date: 10 February 2007

See more news about:

See more from these topics:

Others also read

Self-adhesive switchable smart film from Intelligent Glass has been retrofitted to glass partition meetings rooms in India.
Following on from last year’s move to a new 100,000sq ft facility, Clayton Glass are again on the investment trail.
The flat glass industry in Egypt is in danger due to rising costs, the foreign currency shortage, and the lack of some production inputs.
Smart glass windows have become an increasingly popular feature in commercial design because of their ability to increase the energy efficiency of commercial buildings.
Curved switchable glass is an inspirational way to enhance a feature room. With its gentle curvature, it is pleasing to the eye and draws you in.
Merck, a leading science and technology company, announced that it will be establishing a production unit for liquid crystal window modules.

Add new comment