Korean screen makers face 20% price hike from U.S. supplier

[Photo provided by LG Display]

The display panel industry is facing another blow as prices of special glass used in display panels will be raised by 20 percent adding onto poor sales due to a stagnant TV market,.

The U.S. specialty glass and materials maker Corning Inc. announced on Wednesday that it will raise prices on its display glass substrates. The new prices will be applied to glass substrates of all sizes starting in the third quarter. Glass substrates are the basis that forms liquid crystal display (LCD) and organic light-emitting diode (OLED) panels.

Both Samsung Display Co. and LG Display Co., two of Korea’s largest screen makers, use Corning goods in their large display panels for TVs. Corning said the price hike is a “result of increased costs in logistics, energy, raw materials and other operational expenses.” Though the glass consumes only about 5 percent of a display company’s total costs, the price hike could hit the industry hard, which is already suffering from slow sales.

LG Display has been posting losses since the second quarter last year. The company’s annual loss last year amounted to 2.09 trillion won ($1.58 billion). In the first quarter this year, LG Display posted an operating loss of 1.1 trillion won. The company’s first-quarter global TV shipments were about 46.52 million units, the lowest first-quarter figure since 2009, reflecting sluggish demand. Samsung Display is also struggling, with an operating profit of 780 billion won in the first quarter, down 28.4 percent year-on-year.

Forecasts say, however, that demand for display panels will gradually recover in the second half of this year, following a recovery in the TV market. According to market data tracker Omdia, estimated TV shipments this year will be 205.5 million units, up slightly from last year.