LG.Philips to refocus CRT business

LG.Philips Displays, a joint venture between LG Electronics of Korea and Philips of the Netherlands, a global provider of cathode ray tubes (CRT) for TV and computer monitors. In recent months, however, capacity increases and very strong price erosion of flat panel TVs have created adverse market conditions for CRTs in advanced markets such as Europe. Flat panel TVs have reached mass market price points in an unexpectedly short time. The resulting reduction in demand for CRTs has adversely affected LG.Philips Displays operations. As a result, LG.Philips Displays will take an impairment charge of approximately US$725 million in its fourth quarter results, as a non-cash write-off of assets, which is necessary according to US GAAP. “Recognizing the dynamics of the CRT industry, we must be proactive in managing our asset base and capital structure. We have to bring ourselves into a better position to continue to supply our customers with the most competitive products,” said Jeong IL Son, President and CEO. In order to improve its business position and financial structure, several options are being discussed with various parties, while the company is strengthening its long-term supply arrangements with its key customers, LGE and Philips. Mr. Son noted further that the global demand for CRTs is shifting. “The market for CRT is still large, but it is becoming more concentrated in emerging economies,” he said. “LG.Philips Displays is committed to maintain its technological and commercial leadership in those markets, where CRTs will dominate in the years ahead.”