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Citi worried about falling TV panel prices, reiterates Neutral on Corning

  • Citi notes prices for large-sized TV panels are down another ~$2, or ~1%, in August, and that DisplaySearch expects "continued price pressures during the seasonal build period as demand remains uncertain."
  • The firm also observes soft PC demand is affecting TV panel prices (by hurting the supply/demand balance), and that tablet panel prices are down 1%-5% due to rising supply.
  • With over 70% of Corning's (GLW -1.1%) net income stemming from display glass sales, Citi is reiterating a Neutral on the company, even though it considers its dividend, cash generation, R&D, and manufacturing abilities "impressive."
  • Soft TV panel prices also stand to impact AU Optronics (AUO +0.7%) and LG Display (LPL -0.6%).
  • Corning's Display Technologies unit posted 21% Y/Y rev. growth in Q2. Q3 LCD glass volumes were forecast to be up slightly Q/Q, and price declines on par with Q2.
  • LCD driver IC vendor Himax recently forecast its Q3 large-panel driver sales will be "sluggish" thanks to soft TV/laptop demand and the end of China's TV subsidy program.
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