Veterans in semiconductor investing who have some experience with the likes of Micron
Even though the market for LCD televisions has been white-hot (shipments rose at least 150% for the third quarter of this year) and retailers such as Best Buy
Well, the story continues to get a bit more interesting. Japan's Sharp, one of the larger players, has announced that it will increase production capacity by about 10% -- looking to raise its monthly output of 37-inch screens to about 56,000 units. The impetus for this decision is pretty basic -- management believes the company is not producing enough of the larger units quickly enough and that it will lose its share if it can't keep up with the market's accelerating pace.
Not too surprisingly, this increased capacity should come in time for the expected spike in demand from the upcoming soccer World Cup. While it's likely that this event won't earn so much as a yawn from the average American sports fan, it is the major world sporting event, and I'd therefore imagine that a lot of people around the world have been saving up their pennies, eurocents, centavos, and fen in order to buy a better TV to watch the games.
Certainly, the demand is more than enough to make the LCD market a winner. Yet to be seen is whether the industry players can add capacity intelligently and not spark these boom-bust cycles of under- and then overcapacity. If you believe in their collective sanity, AU Optronics and LG Philips are probably worth some due diligence based on current prices. If you're a bit less confident, you might want to check out other ideas like Best Buy, Circuit City, or Corning
For more Foolishness that won't go flat:
- Sony's Spin Sputters
- AU Optronics Up Off the Mat
- Big Deal for Little Screens
- Sharp's Enormous LCD TV
Best Buy is a Motley Fool Stock Advisor selection.
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).