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Thursday, March 19, 2009

Corning guides glass volumes higher

The company had predicted a drop of 20-25% for the quarter and is now saying it will be closer to flat to down 5%.  They say pricing will still decline significantly.  The volumes are a big improvement.  Panel makers such as LG Display (LPL) and AUO (AU Optronics) have been suggesting stronger utilization rates – LPL may be at 90% now according to some press reports.  These companies also say demand isn’t necessarily there and they’re worried they’ll have to cut back again if everyone else doesn’t stop producing.  Like all commodity businesses, its the other guy’s fault when there’s too much supply.

The panel market is likely a good microcosmic indicator of the overall supply chain picture and the cycle seems ready to play out there first.  If demand doesn’t pick up, utilization rates likely drop off as quickly as they just rose.

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