By: Richard Del Cazzo
Web site: http://www.hdtv-hdtv.com

LG.Phillips flat screen TV giant to float early summer

LG.Phillips LCD, the world's largest maker of flat screen TV displays, will launch an initial public offering in June or July to raise around $1 billion, people familiar with the company said on Wednesday.

The 50-50 joint venture between South Korea's LG Electronics and Netherlands-based Phillips that was set up in 1999, will be listed in Seoul and New York. It was too early to talk of exact valuations, but the company was expected to be worth in the region of $8 billion, depending on market conditions and what is being put into the joint venture, one source said.

Philips declined to comment, but Chief Executive Gerard Kleisterlee said last week that if the economic climate was good, the joint venture should float as soon as possible.

LG was not immediately available for comment.

LG.Phillips LCD has a 21.5 percent of the market for large flat panel displays, with rival Samsung Electronics <005930.KS> from South Korea following behind at 20 percent in the fourth quarter of 2003, according to U.S. research group DisplaySearch.

The venture made a 27 percent operating margin in the fourth quarter, generating 398 million euros of net profit on sales of 1.54 billion euros, more than double the revenues of 2002.

The source did not believe recent cancellations of listings by chipmakers such as Siltronic in Germany would affect the issue.

"It's a flat-panel story, a very well-defined segment of the market," the source said, contrasting the volatile chip industry with the steady and rapid growth of the thin display market.

The flat-screen TV market is one of the fastest growing segments of the $2 trillion global technology industry, as computer users ditch bulky tubes on their desks and consumers are attracted to stylish thin televisions on their walls.

Global LCD flat panel TV revenues in the fourth quarter were up 91 percent year-on-year at around $7.7 billion, DisplaySearch said.

It predicts flat screen LCD monitors, the world's dominant flat panel tv displays, will overtake cathode ray tube (CRT) monitors for the first time on a unit basis in the United States in the first quarter of 2004 and globally in the second quarter.

Some 14.4 million flat panel LCD computer monitors were shipped in the fourth quarter, up 45 percent from a year earlier. Shipments of LCD TV screens were up 238 percent at 2.05 million units, DisplaySearch said.