LG Display Co Ltd (LPL) 2011 Q1 法說會逐字稿

Good morning and good evening. First of all, thank you all for joining this conference call. And now we'll begin the conference of the fiscal year 2011 first quarter earnings results by LG Display. This conference will start with a presentation, followed by a [division and] Q&A session. (Operator Instructions).

Now, we shall commence the presentation on the fiscal year 2011 first quarter earnings results by LG Display.

Welcome to LG Display first quarter year 2011 conference call. My name is [Hee Yeon Kim], Head of IR department. Some of you may already know, but I have succeeded Mr. Anthony Moon as the head of the IR department at LG Display since beginning of April.

On behalf of LG Display, I would like to welcome everyone to our global quarterly earnings conference call. I am joined by our IR staff, as well as representatives from TV Marketing and IT Marketing. J.S. Park is heading up the TV Marketing department, and Seong Lee is Vice President of IT Marketing department.

Before we go into the Q&A session, please allow me to highlight our first quarter result and catch up on our outlook for second quarter. Next slide, please.

Before we move on to the earnings result, please take a minute to read the disclaimer. I would like to remind everyone that results are based on the consolidated IFRS accounting standards and are unaudited.

Next slide, please. This conference call will take one hour. We will discuss Q1 earnings result, performance highlights followed by Q2 outlook.

Moving on to the revenue and profit in the next slide; revenue in Q1 was KRW5.4 billion, down 17% quarter on quarter, and down 9% YoY. Addition line of panels decreased by 15% quarter-on-quarter, and like-on-like basis ASP declined by 4% quarter-on-quarter.

Due to the low seasonality (inaudible) and retailers continued a conservative inventory policy in Q1, we recorded an operating loss of KRW239 billion, operating margin of minus 4%, and EBITDA margin of 11%. Income before tax was minus KRW202 billion. Net income was minus KRW115 billion.

Moving on to the slide number 4; looking at our financial position and ratio as of March 31, we have KRW3 trillion in cash and cash equivalents. Inventory increased to KRW2.5 trillion, which is an increase of 13% quarter-on-quarter, due to our strategic decision to prepare for upcoming high-demand season, as well as to fully meet with our customer demand for differentiated products such as FPR 3D, [tablet PC] and IPS monitors. But the days of inventory remained relatively unchanged from the previous quarter. Our net debt to equity ratio increased slightly from previous quarter to 15%, which is still manageable.

Moving on slide 5, looking at our cash flow. Cash at beginning of the quarter was KRW3.1 trillion. Cash flow from operating activities resulted in cash inflow of KRW814 billion. Cash flow from investing activities resulted in an outflow of KRW991 billion. And cash flow from financing activities resulted in an inflow of KRW52 billion. As a result, net change in cash was outflow of KRW122 billion.

Moving to slide 6, I would like to go over our performance highlights. Looking at our shipment and ASP, our panel shipments decreased by 15% sequentially to 6.7 million square meters. This is mainly due to Q1 low seasonality and conservative industry view by customers. While panel prices fell by 4% on a like-on-like basis in Q1 for us, our blended ASP remained flat compared to the quarter ago. This is mainly due to our shift to higher value-added products, including LED TV, tablet PC, higher resolution displays for mobile devices, IPS monitors, and FPR 3D.

Moving on to our product mix on slide 7, you will see that during Q1, the TV segmented represents 48%, followed by monitors at 24%, notebook at 18%, and applications at 10%. The decrease of TV portion is a direct result of decline of both ASP and shipment, which performed worse than IT.

In contrast, the rising proportion of IT is a clear reflection of the relatively flat IT price, compared to TV prices. Applications, which is mostly mobile displays, has gained 2 percent point share, as demand for the high resolution panels for smartphones remains strong.

Moving on to slide 8, and looking at our capacity; although we've added [P8-E] during the quarter, our producible capacity remained unchanged, with 10.7 million square meters, mainly due to fact that there were lesser number of days in February. The average utilization rate in the quarter was at the high 80s-%, and it is likely to be increased to around 90% in second quarter.

Lastly, we turn your attention to outlook on the next slide. In second quarter, we are expecting our total shipment to reach a high-teens percentage growth sequentially, due mostly to the seasonality of the industry. We expect the TV panel price to remain stable, but do expect it to rebound sometime in mid quarter. While we anticipate IT panel price to maintain its upward trend, our ASP in second quarter is expected to be better than the industry average, since the proportion of high value-added products will be significantly increased. Within the whole food chain of panels, we see no excess inventory throughout the chain, as the set manufacturers have continued to reduce their inventory during Q1, and start to introduce new models. We do expect the demand to improve in the latter part of the quarter.

With that, I will end my summary of Q1 and outlook for Q2, and be happy to take your questions. Operator, proceed to Q&A session, please.

(Operator Instructions). C.J. Muse, Barclays Capital.

First question, we'd love to probe a little bit deeper in terms of inventory that you see throughout the supply chain, so if you can comment on what you've done with your utilization rates, given the reduced shipments there in Q1, to get a feel for where you are in inventory?

And then, you talked briefly about set inventory is down in Q1, if you could elaborate there as to what you see?

And then I guess talking about a recovery and TV panel pricing, some time in Q2 if you can kind of elaborate on the real drivers there that would be very helpful? Thank you.

Thank you for the good questions. When you look at the inventory side, actually, [said] all the participants in this industry are the -- they didn't have any conviction on the upcoming demand. Thereby it's best policy to handle these kind of uncertain situations on the conservative inventory according policy.

So in this set makers and distributors inventory situation should be very okay. However, if we look at our financial statement our inventory increased a bit at around 13% quarter-on-quarter. This is only because of our strategic inventory optimization for the expectation of the demand growth for our differentiated products such as tablet PC, FPR 3D and IPS monitors.

So the situation between our inventory and our customer situation is totally different. All in all, in conclusion, inventory situation in the whole distribution and this food chain are all okay. So because of that, the second quarter demand looks favorable for us.

That's very helpful, if I could just follow up with a second question. On the component side as you look to drive down your own cost, can you talk about where you see the ability I guess with some of your suppliers to further pressure them to reduce pricing?

In first quarter we were very happy to reduce our component prices and in between lead to a high single digit, so in overall areas really do sell the component prices. But going forward, as you already know, raw material prices should continue to increase. And also, Japan earthquake impact would be take in the middle of second quarter, but we are not sure at this stage anyway going forward. It's not that easy to reduce component price temporarily.

Sure, that's great. And sorry, I lied, one last quick question; can you comment on your adoption rate of thinner glass, I know that's prevalent on the new book side, but curious on whether going to the 0.4 millimeters is something on the roadmap for TVs?

I don't understand, you said thinner glass?

Yes.

What do you mean? Wait a second please. We cannot understand what you mean now. Actually we already adapted a thinner glass, that that should be the 0.5T glass. Actually, in --

Okay, great, thank you.

Okay, it should be in our full year question.

Mr. Yair Reiner from Oppenheimer.

Just a bit of clarification on the guidance, you say that you expect utilization to increase, which sounds relatively mild from high 80s-% to about 90%. But you talk about shipments increasing by high-teens percentage. Where is that gap coming from between the relatively low increasing utilization and relatively high increase in shipments?

Actually in second quarter our capacity growth is likely to be 7%, because we already started P8-E 3rd generation Gen 8 fab in this March. So in second quarter we will get additional capacity growth at around 7%. And also, as I mentioned before, our inventory increased by 13% sequentially, so altogether inventory plus additional capacity growth should give us a chance to increase our shipment by high-teen.

Got it. And then the increase in inventory, the comments you made earlier suggest that it's going to be structural and going forward you expect to hold more inventory on your balance sheet as your customers hold less. Did I understand that correctly?

Yes, correct.

And then in terms of Japan, can you maybe talk about specific components that you see could potentially be in tight supply because of the disruption there?

For us it is okay, but our real concern is hided areas. When we discuss with our direct component suppliers, they said they are okay and, fortunately, our material suppliers in Japan they are located far from the direct places from the earthquake. But we don't know the real situation.

Second and third vendors situation, that's our concern, but we cannot know the detailed situation of that kind of second and third providers.

Got it, got it. And then one last question from me, as you moved to more advanced technology or higher percentage advanced technology in the quarter, did that impact your yield at all, and if you can quantify that in any way it would be helpful? Thank you.

Actually, in the kind of differentiated advanced product did impact our LED issue as a negligible [portion] in this; we don't have any kind of LED support from the new product.

Thank you.

Andrew Abrams from Avian Securities.

First, I wonder if you could give a breakdown on LED backlighting versus CCFL.

LED portion in TV that's around mid-30% and the remaining is CCFL.

Okay. And I wonder if you could talk a little bit about your strategy in China, I assume all the approvals have been in. Have you scheduled when you're going to start actually breaking ground in China?

It's not decided yet, actually one year or two years ago we tried to be a number one fab [fielder] in China market. However, it has still laid continuously, so now we decided to ramp up Korea fab faster. So it does take time to make a decision for the China fab. Anyway we have to break -- we have to break from there some time, not soon, so the final decision making will be made within this year.

Okay. So you don't expect to actually break ground before the end of this year, is that correct or?

We are not sure, but not soon.

Okay. And I wonder if you could talk just a little bit about your advanced technology product, as you're talking about in second quarter. Can you give a little detail as to what you're talking about specifically on advanced technology?

Actually advanced technology means differentiated technology, such as the 3D area; that's the full impact and [recover]. That's very comfortable 3D technology, nowadays our consumers becomes a big fan of the kind of 3D technology, so our demand from our China, Korea and US customers are increasingly growing.

And also second, advanced technology based on the IPS technology, so as you already know, our -- one of the famous customer are aiming the mobile customer they also a big fan of our customer in the smartphone area. Because of that, we are gaining market share in smartphone and tablet PC market, so the kind of products also give us to improve our profitability in second quarter.

Got it. And last if you could just talk a little bit about fab conversions that you might be doing to move further into the tablet market. Have you converted any of your fabs specifically or lines specifically for tablets and moved that away from something else that you've been producing in the past?

Actually, last year only in small size fabs, such as 3 Generation and 5 Generation we did provide a tablet PC, but this year we are moving to Gen 6 fab. And also already this year, we already announced that we will start to produce tablet PC from our new Gen 8 fab at the end of this year.

Right. And you mean the Gen 8 fab that is the OLED fab or is that the --?

LCD fab.

LCD fab. And lastly, just on OLEDs, can you give us an update on what the status is of your OLED production facility?

For now we already start a small size OLED production at the end of the first quarter this year. And capacity is around 4k in terms of [module] glass input and it will be increased to 12k in the middle of this year. That's, overall, our capacity growth, our plan for small size OLED fab. And then we will also -- we also have plans to 8 Generation OLED fab ramp up maybe in the middle of year 2013. So that's our -- just the planning for our ramp up scheduled for TV OLED.

So in this year we will test our suitable technology for 8 Generation OLED. If we decided to choose one suitable solution maybe at the end of this year, we will announce CapEx investment late next year.

Got it. And the 4k to 12k ramp that you're doing now, is in which generation facility?

4.5 Generation.

[4.5], thank you very much, appreciate it.

Henry Seggerman from International Investment Advisers.

I wanted to ask about AMOLED. I had heard from an analyst that very, very recently, you had sold 7,000 or 8,000 AMOLED panels to Nokia. This may or may not be true. Did you sell AMOLED panels to Nokia; and why Nokia instead of LG Electronics? Question number one.

Question number two, on the same subject is, I noticed here that you've got IPS in the upper right corner of your presentation. Is there a view internally that the IPS solution, which is in the retina display, as I understand it, is somehow equal to, or even superior to AMOLED, especially in text reading, for text reading purposes?

For your question, as I mentioned before, we already start the production of our small size OLED fab in first quarter this year. It means we already start provide our small size OLED panel to major global customers. The major global customer, we cannot disclose a direct name, but we think you might be right.

And in the middle of this year, we also have a plan to provide our small sized OLED panel to our local customer, LG Electronics.

And for your second question, IPS technology; actually, if you look at iPhone or iPad, although this is our -- this iPhone use IPS technology, we are main suppliers. Actually, if you look at iPhone, although that's not OLED display, you can easily see the text message, because of our sophisticated, high resolution characteristic. This kind of sophisticated resolution technology is driven by IPS technology.

Is it okay for your answer?

Just then, you're saying that the Company has strong belief in the IPS technology relative to OLED technology, not necessarily better? And you do confirm that you have sold AMOLED panels globally? But I guess the question is why did you not sell AMOLED panels for the Optimus?

Why? Actually, that's not our -- actually, it is related to our customer's product line-up and product line-up schedule. So we already have a plan to provide our OLED and IPS panels to our customers. That's customer's product line-up and schedule issue.

Okay. Your customer is, of course, your largest shareholder. But in any case, thank you for answering my question.

[Mr. Stephen].

Hello. Sorry, can you hear me?

Hello.

Hi. Sorry, the operator (inaudible). I just want to talk about cost down at the minute. What did you do in terms of the first quarter? I'm just thinking in terms of component (multiple speakers).

Operator, the line, there is a noise, so we cannot understand.

Hello, can you hear me now?

We cannot hear you.

Okay, can you hear me now?

Better.

Hi, sorry about that. Yes, I'd just like to try and understand what's going on, in terms of component and raw material costs. I'm not sure if you said much about what you saw quarter on quarter in the first quarter.

And also, I'd just be interested what you expect for the second quarter, in particular, where would those savings come? Obviously, the most obvious it seems likely is maybe an LED kit feeding into backlight unit. Would you be able to talk about that, please?

If I may understand correctly, first quarter material cost reduction was around high single digit, as I mentioned before. So the most of material side, we reduced our price in first quarter. But in second quarter, actually it's very difficult to mention how much we will reduce for the material side, because there are uncertainties in the supply demand situation for the core components coming from Japan market, because of the Japan earthquake. As I already explained before, that should be enough.

Okay, thank you. Also, would you be able to talk about what the demand situation is like for TVs overall right now? Because obviously, looking at your results, TVs as a percentage of income was -- as a percentage of revenue, was very low this quarter. What are you seeing in terms of overall demand, and also in relation to Sharp closing its 8G and 10G? How can we think about that?

Stephen, your question is the demand of Q1 TV?

Yes, just what's the overall demand environment like in TVs right now? Because I just noticed that, in the first quarter, TV revenue as a percentage of the total was very weak, or very low. Obviously, that's partially seasonal, but --

Okay. Let me explain the Q1 situation of the TV demand. We expect around 10% growth rate this year, in terms of unit. And also, we expect around 15% to 17% of growth rate in terms of area base. And we have just said around 10% in Q1 in terms of unit. But actually, sell-through data, we got around 15%.

So sales demand is much higher than our expectation, but the panel shipments, because of last quarter's inventory, our customers, sell-through is higher than our expectation, but panel shipment is a little lower than our expectations. That's for our revenue. So the area base shipment is lower than our expectation. That's why our portion is decreasing by 8%, compared to last Q1 -- Q4.

Is it okay to you?

Yes, I think so, yes. And just finally, on the call earlier on -- well, on the notes I've seen from the Korean call, you're saying that you expect FPR to be 50% of your TV panels. Is that correct?

50% of our portion of FPR in second half of this year is our target. And I think it's possible. It depends on our price strategy, and also our customers. The demand is getting bigger and bigger; continuously, we got a bigger number. So it's possible.

So just the forecast of demand of 3D this year, research companies does -- they think around 20 million for our demand forecast. It's actually not forecast; it's a new creation of new technologies. We create new market, so we expect around 25 million to 30 million 3D panels demand for this year. And our target is around 50% to 70% share in this new market.

Right, thank you very much. That's very helpful.

Jeffrey Toder from RBS.

First, on the ASP, you said on a like-like basis, prices were down by 4% on a square meter basis; for the quarter they were about flat. Does that difference mostly come from the premium on the premium products, in other words, the higher ASP or the higher proportion is responsible for that 4 percentage point difference?

Yes, you are correct.

Okay. And how much do you expect the change -- I think that you're going from, say, 30% to 40%. How much do you expect that to add to your ASP in second quarter?

It's a bit difficult. Anyway, it should be higher than first quarter. So as you mentioned before, the high end premium portion should be increased by 10 percentage points in second quarter (inaudible). We will have more chance to increase our ASP on top of the industry ASP increase. But anyway, it should have been higher the first quarter.

You mean the difference between like on like and blended should be greater; in other words you should get more than 4 percentage points, or just ASP should go up quarter on quarter?

Potentially greater. That should be written off; we're thinking of a way.

Okay. And what was the percentage of premium products in fourth quarter?

Fourth quarter, sorry, I didn't have the numbers. So our team will get back to you on that. First quarter --

So just to be clear-- so to be clear, if the like on like were flat, that means you would say that your ASP on a blended basis would be up by more than 4%, that's what you're guiding?

That's correct.

Okay, good. Second, I was a little confused at one of the answers to the questions earlier. I know that you've mentioned you've strategically built inventories, because you expect demand to increase. Do you expect your inventory level to drop in second quarter, or remain at a similar level?

As I mentioned before, our shipment growth at high-teens should be the function of capacity growth of 7% plus inventory decrease. It means our inventory should decrease at the end of the second quarter.

Right, okay. And you mentioned that inventories were flat. Obviously, inventory days have gone up a lot, so how would we quantify flat quarter on quarter?

Sorry, I can't understand you, what you mean.

Yes, you mentioned that your -- in dollar versus days, right, your inventories went up, but I think that you mentioned, on a unit basis, that you felt that inventories were flat quarter on quarter, that you didn't have an increase in inventories. And I was wondering if you could quantify that at all?

Actually, in first quarter, our dollar volume inventory increased by 13%. It means number of days should be flat or slightly lower than previous quarter.

No, actually, it means that your inventory days went up, because your revenue went down and your inventories went up. So you have higher inventory days in the second quarter -- in the first quarter than you had in the fourth quarter.

Actually, to understanding for the inventory days should be quite different between you and our Company. Actually, our Company inventory holding period should be calculated based on coming months, coming quarters. So we expect our second quarter number demand should be much bigger than first quarter. So our inventory days at the end of first quarter should be lower than last quarter.

So if I look at the forward inventory days, then you're implying that, that number would be something like 35 days?

Actually, this should be close to 30 days.

30 days forward. So the amount of inventories now versus the revenues that you expect to receive would be about 30 days?

Actually, in the actual holding period, should be calculated by forward-looking method, not this month's revenue basis.

So then you're talking about -- I'm sorry to dwell on this, but I'm just trying to get an idea of what the number is. So should we be looking at it on a unit basis, or how many weeks of finished goods inventory do you have right now?

How many weeks?

Yes.

Actually, our normal weeks for IT products, that's two weeks and in case of TV that's three weeks. But the number of -- our situation is slightly below than our normal situation.

Okay. And for TV?

Actually, for more detailed information, can you call me later? It is (multiple speakers). Thanks.

Okay, sure, no problem. And then just one last question; you said that some of the demand is for an inventory rebuild amongst your customers, for second quarter. So could you just give us an idea of what inventories are today, and where you expect them to be, say, by the end of the quarter?

Actually, it may be further time answers. End of this quarter, our inventory ranges should be lower than this situation, because our capacity growth should be below our shipment increase. So in this number of holding inventory, days should be lower than now.

Okay, well maybe we'll pick this up after the call, if you don't mind. I'll give you a call afterwards. We can go into the numbers in a bit more details. Okay, thanks very much. That's very helpful.

Benjamin Lu from Seligman Investments.

I'll ask just probably one or two questions for time's sake.

You guys had talked about breakeven in OP for first half. Can you break down in terms of how you can get there; whether it's from shipment increase, ASP, mix change? And then I have a second question.

Actually you already have got an answer. Shipment increase, ASP increase and mix change.

Is there any way you can rank them in terms of what will be the biggest contributor for the profitability in Q2?

Actually there should be the combination between shipment, ASP and mix, but differentiated one from our competitors. Competitors should be mix, structural mix change. Actually, we have a dominant market position in tablet side. Tablet shipment should increase by at least 2 times sequentially and also FPR product, that's very high end premium product. That kind of mix change give us a chance to increase our profitability meaningfully in second quarter.

Okay. And if I can delve into the higher end products a little bit more, if you're not comfortable with the specifics, that's fine, if you can talk around it. But I wanted to better understand the margin difference of, let's say, FPR and the tablets versus all your other panels, because that's what you consider high end mix, right?

On this parts J.S. and [Seong Lee] will give you good answer.

[As for] margins only they're higher than [3 star 2D], so I cannot talk exact numbers. And the per cent of FPRs in Q2 is, I think, around 3 times higher than Q1; maybe 4 times higher than Q1. So it will contribute a lot to increase our margin, our profitability.

Do you think that as we go through the rest of the year that FPR margin premium versus your other TV products will continue to remain? Or do you think that you need to strategically reduce pricing, and thus maybe earn a smaller margin for FPR going forward?

We don't have any plan to cut price premium, because we had an end-user survey in China. And this is only for China, but Chinese end user consumer won't pay 10% premium for FPR compare [as] type. So based on our consumers' willingness to pay the premium for our FPR, we don't have any plan to cut premium; we're going to increase, maybe.

Got it. And then on the tablet side the margin (inaudible)?

I think the same goes for the tablet. The still [long-term] notebook integral is no good in terms of profitability. One thing that I can say clearly is the tablet is much better than conventional notebook and monitor. We believe -- as the tablet portion is increasing in second quarter, we believe it will contribute a lot to our profitability in our -- to the Company.

And is your tablet panel still shipping only to one customer?

No, actually from this month we start shipping to many other customers besides the one company in California.

Got it. Okay. Thank you so much.

Dan [Malcolm] from Viking Global.

I just had a quick question on -- I might have missed it before and I apologize if you're repeating it, but your shipments came in worse than expected, I think, this quarter. They were down 15% sequentially and you guided down high single digit. And it looks like the TV shipments in particularly were down a lot more than, I guess, expected down. TV sales were down almost 30% sequentially and down 20% year over year, or 19% year over year. What was the source of the weakness relative to what your original expectation was in the first quarter?

Because of the oversupply -- during oversupply time, our customers minimized inventory because the price continuously down. And also during Q1 our customer still had a problem to clear LED inventory, set the inventory. So it will be cleared, I think, end of Q1. That impacts a lot to us. This way sell-through is higher than our expectation, but our panel shipment is lower than our expectation. And also, profitability is one of key -- our major customer that reduced, but it's because of [panel] purchased from us.

Right, okay. So I'm just trying to understand the sell-through commentary relative to the selling commentary.

And then for the guidance for the first quarter, where is the high teens? What's the driver of that? Why is it so strong or up so much?

Because of now the inventory whole chain is very healthy and some US retailer their inventory level is a little lower than their normal level. And also, because of seasonality and --

You're expecting some restocking?

Yes. And it's also our major customer, they start new products and ship to market from Q2. So it will help a lot.

Okay. And then the last question from me is just from a prosecution perspective. Shipments were down 15% in the fourth quarter. Your production was not down that much, correct? What was production on a quarter-over-quarter basis from an area perspective?

In first quarter our utilization ratio was high 80s, which is similar to Q4 last year. So it means our production was also very similar as to Q4. So if we take out our shipment numbers, our (inaudible) production number, it should be our increased inventory.

Understood. Okay. Thanks so much, I appreciate it.

(Operator Instructions) Andrew Abrams from Avian Securities.

Just a point of clarification and I'm not sure if I missed it when you said it. The percentage of premium products that you had in fourth quarter, first quarter and what you're expecting in second quarter, could you just repeat those numbers?

Actually for Q4 last year we don't have the number right now. We will get back to you on that. In first quarter that's 30%. In second quarter we are expecting 40%.

Got it, okay. And just also a clarification on LED backlighting; you said you were at 30% in first quarter. Where would you expect to be in second quarter?

Actually in first quarter that made 30% and in second quarter made 40%.

40%. Thank you very much.

(Operator Instructions).

Operator, if there's no further question, we could end our conference call now.

Okay. There's one last person left for asking questions.

Okay, we will take.

[Su Jin Park from LG Display].

I just wanted to ask about the CapEx. You said that there's a possibility that it might be less than the KRW5 trillion that was originally planned. Could you comment on that and maybe where the reduction will come from?

Actually we never mentioned about the reduction of our CapEx; we just mooted on our CapEx plan. So it means we don't have any material change in our CapEx plan this year.

How much is going into OLED?

Actually we tend --

[Well, can you give me a] breakdown of the CapEx numbers?

Actually 10% to 15% should be OLED CapEx.

And the rest is maintenance? Or is the other --?

Actually 30% is maintenance and 25% for Gen 8 and another 25% for Gen 9. That's overall mixture of our CapEx.

Thank you.

P9, sorry.

Okay, thank you.

Sebastian Ho from Yuanta Investment Securities.

Just one quick follow-up here. Just wondering can you break down your details about the shipment growth in second quarter, because you say that this will be the high-teens percentage growth. So how much would that go to TV, and MB, and monitor, and also the tablet? I don't know if you can provide that detail. Thank you.

Actually in terms of high-teens, in case of TV they should be the same as the high-teens; and in case of IT that's mid-teens' growth.

So, IT is mid teens, so that included MBE and also the monitor, right?

Yes, monitor and notebook.

And how about the tablet?

The tablet's close to 20%.

20%?

Yes.

20%. But the market [expects] the iPad would be -- grows around 100% in second quarter from first quarter. So that means perhaps you can grow around that round rate too, right? So is 20% too conservative?

Yes, that's correct. I have some misunderstanding myself. I think the tablet, in terms of the [airbase] I think the increase almost doubled.

Okay. Thank you. No more questions from me.

Jeff Su from Macquarie.

I just have two quick questions. One is just housekeeping. I was just wondering if you could state for the first quarter how much, if any, of inventory provisioning did you do in terms of rough amount? Thank you.

KRW24 billion.

KRW24 billion, thank you. And then my second question is more, I guess, mid to longer-term strategic. It's just then looking at your business and I'm looking at with the TV brands, we've seen a couple of examples now of TV brands and panel makers cooperating more and more closely. I think you guys have talked about in the past whether it's been your own very successful joint venture with Vizio or Raken, or with Philips today or some of the Japanese brands.

I just wondered longer term what is your view or strategy on the LCM or the module assembly business as it pertains to TV brands and open cell. Just is this something that you're looking to do more aggressively? Or you're happy where you are now with strategic customers? And what's your thinking on the LCM business longer term? Thank you.

We don't have any plan to sell -- do sell (inaudible), our basic strategy to sell our LCM to our customer, but you already mentioned our joint venture. We have two joint ventures; Raken with Antram and L&T with TPV.

We only provide cell to our joint ventures to supply our customers in set. And we are developing very competitive and very high-end product. We call it RTV. So only for their products we provide a cell.

Okay. And should we expect -- or more joint ventures of this sort going forward, or?

I'm not the right person to talk about another joint venture.

Okay. All right; thank you.

Jeffrey Toder from RBS.

Just a very quick question. You talked about your target for breakeven for first half. Is that net or operating?

It should be operating side.

For operating breakeven in first half?

Yes.

Okay, great. Thank you very much.

(Operator Instructions),

Operator, if there's no further questions we could end the conference call now.

Yes, there are no people who are waiting for their question.

Yes, okay. On behalf of LG Display we'd like to thank you for your participation in our one quarter earnings conference call. If there are any of your questions that we failed to answer, or did not answer, the answer was not sufficient enough for you, please don't hesitate to contact either myself or my colleagues. Thank you.