Call it a story of green glass and high tides.
The continuing swell of demand for high-definition television sets has been a pleasant surprise for companies that make components of liquid-crystal display TVs.
None other than Corning, the largest maker of glass used in HDTV displays, said this week that it’s operating at full capacity to keep up with LCD sales, which will rise this year at “the upper end” of its growth forecast of 25% to 30%.
“We are not seeing evidence of the economic downturn impacting our forecasted growth,” James B. Flaws, chief financial officer of Corning, said in a statement. “The strength of TV sales to date is consistent with consumers’ behavior during the last three recessions.”
Lesser-known companies in the integrated-circuit industry also are benefiting, as worldwide market-share leader MediaTek more than doubled its first-quarter shipments from a year earlier to 5.2 million units, NPD Group unit DisplaySearch said this week. Revenue for Taiwan-based MediaTek revenue is up 28% through the end of May, the company said this month, while overall worldwide first-quarter shipments for all manufacturers jumped 26%, DisplaySearch said.
Such demand for HDTVs is helping overall consumer spending in the U.S. rebound from the first four months of the year, where sales were either flat or down for each month, according to NPD Group. In May, consumer technology spending increased 7% from a year earlier to about $5.4 billion, with LCDs and notebook computers each accounting for about 15% of the total.
Whether May’s boom is enough to lead to consumer spending increases for the rest of the year remains to be seen, said Steven Baker, VP of industry analysis for NPD.
“The real test will be in the third and fourth quarters,” Mr. Baker said in a statement. “Retailers and manufacturers will have to provide more compelling products, promotions and pricing as we enter the critical second half of the year if they are going to deliver meaningful growth in 2008.”