… the Fiscal Year 2012 Third Quarter Earnings Results by LG Display.

Welcome to LG Display third quarter year 2012 conference call. My name is Hee Yeon Kim, Head of the IR Department. On behalf of LG Display I would like to welcome everyone to our global quarterly earnings conference call. I’m joined by our IR staff, as well as representatives from TV marketing, IT marketing and Market Intelligence. Sang Lee, is Vice President of Market Intelligence; Kevin Choi is Vice President of IT Marketing -- IT Marketing Depatment; J.S. Park is heading up the TV Marketing Department. Next slide please, before we move on to the earnings results. Please take a minute to read the disclaimer. I would like to remind everyone that results are based on consolidated K-IFRS accounting standards and are unaudited. Next slide please. This conference call will take about an hour. Before we go into the Q&A session, please allow me to highlight our Q3 results, performance and outlook. Moving on to revenue and profits on the next slide. EBITDA lifted from seasonal demand and launch of the new smart devices, the panel shipment rose by 7% in third quarter. In particular, Chinese Golden [rift] demand was better than expected with type of government subsidy. As the high-end premium product proportion from FPR treaty to smart device continuously rose in third quarter. We recorded the highest quarterly revenue at KRW 7.6 trillion, up 10% quarter-on-quarter and achieved operating profit turnaround recording KRW 353 billion. Overall panel price has showed this table front and our blended ASP rose as premium product proportion increase. Operating profit margin was 3%, while we recorded EBITDA margin of 19%. Income before tax was KRW 230 billion and net income was KRW 158 billion. Moving on to slide four, looking at our financial positions and ratios. At the end of September, cash and…

(Operator Instructions) The first question will be provided by Brian White from Topeka Capital. Please go ahead, sir.

Yeah. Good evening. When we think about the PC and the TV market in the December quarter, where were we see faster sequential volume growth, TVs or PCs?

Mostly TV, when you look at PC market, the demand is itself will not be that great versus TV, but if you look at our guidance, our guidance is rising, single-digit shipment growth that is mainly driven by TV and also our new cutoff line up in the tablet and smartphone segmentation.

Okay. Now you had a big uptick sequentially in the tablet, PC market for the September quarter is very strong. Can that growth rate continue? Can you deliver a similar quarter-over-quarter growth rate for tablets in the December quarter?

Yeah. Last quarter I expected around 40% to 50% of tablet growth from Q2 to Q3 and we, slightly over 50% growth compared to last quarter. And we -- if you look at same growth rate from Q3 to Q4, but we are not sure about the Q1 yet, but at least Q4, we think we can expect the same growth rate.

Okay. And finally, when we think about ASPs, it seems like your ASP outlook is a little conservative, just is there, it seems like prices for panels are rising. Is there another dynamic that only allows for your prices to be stable in the December quarter as opposed to rising?

Yeah. This is Sang Lee at Market Intelligence. I think market price will vary stable, overall current supply and demand is quite balanced in every segment. Of course, there might be some balance in level of the supply/demand relationship, depending on the panel, but overall, I think the price will vary as stable.

Thank you.

It can be, yeah, okay.

The following question will be presented by Andrew Abrams from Avian Securities. Please go ahead, sir.

Hi. I wonder if you could kind of specify a little further on tab business. Is the growth in fourth quarter coming from additional new models, or is this running higher volumes on existing products and just beginning the real high volume ramp?

Most of them, one is coming from existing product line and the other one is coming from the new product line, so combination of the two segment.

Got it. And would you expect a similar decline in your non-tablet business, meaning, maybe ex-TV business in the IT side, in terms of percent of revenue in fourth quarter that you had in third quarter?

Because of the stronger shipment in the tablet side, yeah, we are expecting small decline in other segmentation in terms of revenue portion. But the degree of proportion, we are not sure about that.

And the impotency is, why we are decreasing our other product segment. We are trying to reduce some relatively low flat-panel product segment. While we are maintaining or increasing flat panel product segment volume and revenue.

Okay. And what are your expectations for capacity in fourth quarter. Would you be expanding further, is there room to expand further since your utilization is running pretty high?

Actually, in case of capacity, we are expecting only 2% growth sequentially and our utilization ratio should be similar as third quarter, because we try to reduce our inventory at the lowest level.

Right. Lastly, could you -- you mentioned OLEDs in your comments. Could you talk a little bit about what your guys are doing there?

OLED remains our strength for the OLED television, like you are asking. Actually, we are targeting to release some promotional purpose -- we’ve done some promotional purposes. We try to release our 55-inch OLED TV within this year with White RGB technology, because it has cost efficient with production efficient, but as volumes scale should start somewhere in year 2013.

Okay. And there was an article recently about the fact that you guys are about to start a mass -- building a mass production facility. I know you’ve talked about kind of your general plans. Has anything changed there as far as your TV OLED mass production?

Actually, there is nothing changed materially. We understand for the OLED fab decision making is that we try to take up some market, market response for our actual release of our new products. Maybe that time segmentation should be near, at year-end or early next year after then we will give you more detailed ideas for the fab investment?

Got it. Thanks very much.

The following question will be presented by Brian White from Topeka Capital. Please go ahead, sir.

I’m just wondering I know last call you talked about ramping in-cell technology. I guess it was in August. How should we think about yields today and when can you reach kind of that 90%, 95% yield rate, is that by the end of the quarter?

Actually, the in-cell technology yield, production yield is being stabilized right now and we are not sure, what is the saturation point. But the yield rate you mentioned like 99.5%, we do not expect.

Even as to indicate our profit ratio is around mid to high 90%, extreme ratio of 99%, something, but anyway, we try we will deliver our in-cell product to over 90% yield ratio.

Okay. Yeah. That’s what I said, 90% to 95%. So you can hit 90% to 95% by the end of the December quarter, is that true?

We hope so. We hope so. We are trying to do.

Okay. What’s the typical way like, where are you today and you are at 60% level or 50%? Just help us understand the ramp on that.

We are heading to 90% ranges.

Okay. But you know where you are today? You are 90% today or you are heading to it?

We are heading to it.

Okay. Where are you today, though?

We are not able to disclose our specific yield rates in public.

Okay. That’s fine. In the mobile market, help us understand the mobile market in the December quarter. Is that going to grow as faster than the tablet market?

You mean mobile, between tablet and the notebook, is it.

Yeah. Just mobile phone, mobile phone.

Mobile phone. Actually, we are thinking even smartphone area also growing faster and the volume wise the growth rate was a mobile phone is slightly lesser than smartphone, I mean tablet.

Really okay. Okay. And finally, when we think about the CapEx for next year, what should we model for CapEx in 2013?

Actually, we -- we’re in the process for the balancing next year. So, we don’t have any final lines to data, but we have some guideline. Next year, CapEx was not higher than this year. This year CapEx is expected to be KRW 4 trillion. So, we’re trying to not to be over KRW 4 trillion in the 2013.

Okay. And one thing I wanted to be clear on, the mix continues to improve, which is great. How much of the positive impact, I mean as we go over the next year, a lot of new products ramping. Over the next one to two quarters as yields improve is that going to have a meaningful impact on margins, positive impact or only a minor impact?

Actually, in Q4 you might witness our early improvement impact. It means our earnings improvement in Q4 could be relatively much higher than the level of third quarter improvement.

Okay. Fantastic. Thanks a lot.

(Operator Instructions) The following question would be presented by Dan Malcolm from Viking Global. Please go ahead, sir.

Hi. I apologize. If you guys said this already I missed it. But did you give your guidance in terms of what you think area shipment growth will be by application for the fourth quarter? So, what do you think for IT, what do you think for notebook and then also for tablets, sequentially a TV? Thanks.

Actually, our shipments items is a higher single-digit sequentially. Among them biggest contributor is used market devices such as tablet and mobile. Tablet and mobile shipment growth is quite meaningful double-digit growth. And in case, our TV that’s around mid-single digit and monitor our specific, trendily our monitor shipment growth should also be double-digit despite our market gloomy situation based also sales to our new product release impact. Is it okay?

I’m sorry. You have new products in the monitor side?

Yeah. Monitor as well.

Okay. And when you say quite significant double-digits for mobile and tablet is that -- does that mean like greater than 30%, greater than 50%, 20% can you frame that for me? I apologize. Thanks.

In most case, yeah, to be greater than 30%.

Greater than 30%, okay. Thank you so much. I appreciate it.

(Operator Instructions) The following question will be presented by Dan Malcolm from Viking Global. Please go ahead, sir.

Sorry. I had one last question. I apologize. Just a follow-up. Do you have any thoughts currently on what you think the first quarter will look like from an area shipment perspective?

It’s already mentioned about the first quarter shipment growth. We expected there is some seasonal impact, because usually there is a seasonal low timing first quarter. However, recently our customers such as debt makers and distributor are not that rightly able to accumulate to their inventory, because for low expectation after demand amidst the global economic situations. So potentially if there is no inventory adjustment, the seasonality -- seasonal impact should not be that big. On this thoughts our market intelligence Sang Lee will add on that.

Yeah. Actually, I’m a little more optimistic about the Q1 forecasting at this moment. Even though, we may go into some seasonal -- some adjustment, right after the year-end of sales. But currently, systems set sales in channel is quite healthy and also we can expect some -- currently very strong sales forecast from the market. Overall Q1 will be gone as we expected, so overall I think the market will be locked at that at this moment.

Great. And for the tablet and mobile for the new -- for lot of the new products that you see out there, do you expect that you could see given that they -- that the yields are kind of coming up the curve to some of these products are kind of launched fairly late. Do you expect that you would see somewhat stable demand in the first quarter or do you think you would even see a typical seasonal decline? It sounds like you don’t expect typical seasonal decline really across the Board, but in those areas specifically, how are you thinking about it?

I think the unlike the conventional PC devices for system monitor and notebook computer, current strongly we are growing the smart devices including a tablet and smartphone, since a little different seasonality. Still, we -- I think Q4 and Q1 there are many new product launch, but I think the -- we can see some sales growth months-by-months even in Q1.

Well, okay. So you could even see some growth in those products than in the first quarter that’s very helpful. Thank you so much. Appreciate it.

The following question will be presented by Ben Lu from Seligman Investment. Please go ahead, sir.

Hi. Thank you, guys. Just wanted to follow-up on one of Dan’s questions. When you talked about significant shipment growth for tablet and smartphones just one or two clarify, I think earlier you said that you expect to see similar tablet growth in Q4 and I think Q3 was up 40%, 50% something like that?

For the tablet?

Yeah.

Yeah.

So Q4 tablet growth will be up about 40%, 50% and I think you said later on that smartphone growth will be even faster than 40% to 50% correct?

Among the only smartphone yeah.

Okay. Got it. And then…

Future...

My next question is…

Go ahead please.

You guys have guided over 400 billion OP in Q4, you guys probably did about I think adjusted OP of little over 300 billion in Q3, can you walk us through how you can increase OP by roughly 100 billion quarter-over-quarter, how much of that is coming from better yields, lower inventory et cetera?

Actually, biggest contributor is our mix changes. Third quarter, our specialty product portion declined over 50% but it will be over 6%. So we are expecting 10 percentage points mixed improvement in Q4. And second contributor is early improvement together with a bottom increase.

Got it. Okay. And then are you guys expecting to book any more provisions?

For the time being, we might have some provision issue but amount would not be that high because we will prepare some individual loss of case instead of transaction. So we are expecting small size instead of the big points every quarter.

Okay. Great. And then my last question, Sang is when will you guys make the decision on potentially lessening your depreciation period to five years. And then if you can walk us through how we should think about your depreciation expense in Q4 through 2013. Thank you.

Actually for this side, it’s not decided yet it’s just getting busy if we plan to more seriously to change our accounting policy, we will deliver the kind of situation to the market immediately. But it is just getting change.

Okay. And then how should we think about depreciation in Q4 through 2013?

Actually, this year depreciation should be KRW 4.4 trillion and next year KRW 4.2 trillion which is a slightly worse than this year. And Q4 depreciation should be KRW 1.1 trillion.

Okay. Thank you so much.

The following question will be presented by DS Kim from UBS Securities. Please go ahead sir.

Thank you, sir. Firstly, when -- earlier you talked about monitor in fourth quarter new product. Is it fair to assume that it includes something like only non-PC like iMac. This is my first question. And second question would be how much visibility. I mean order visibility do you have for tablets. I’m just concerned because your major tablet customer can do the inventory adjustment at the year end. So I’m over 30% volume growth should be a bit too bullish?

The first question, the new monitor, yeah and second question for the tablet event, I’m not just talking about one customer but overall. Our customers demand strong even Q4 and peer valuable Q1. And I will say we are trying to meet our customer’s requirement utilizing our capacity and resources, full resources. That’s our current situation.

Thank you. Actually, my last question would be earlier this afternoon when CFO indicated over 400 operating profit for fourth quarter. Was it after the potential legal provision or before assuming one-off. Can you please elaborate a little bit on that?

Actually, that’s our operating profit assumption. It means that kind of adjustment was already, is already reflected but the rental is not fixed yet. Thank you very much.

Currently, there are no participants with questions. (Operator Instructions) The following question will be presented by DS Kim from UBS Securities. Please go ahead sir.

Sorry. One more question, actually if I calculate correctly, I understand the tablet-PC revenue growth in third quarter was not 30%, 40%, was actually 65% but do you still guide similar 60% growth for the fourth quarter, if I understand correctly or are you meant something like 40%, 50% range, tablet revenue?

Actually, we were talking about the shipment growth in terms of area, not talking about revenue growth.

So that means, third quarter shipments growth was something like 30%, 40% or….

We’re flexing more than that.

Okay. Thank you very much.

Currently, there are no participants with questions. (Operator Instructions)

Actually, there is no participant to ask any question. We will end this conference all. Is it okay to end this conference call.

Yeah. You may.

Yeah. On behalf of LG Display, we thank you for participating in our third quarter earnings conference call. Should we have further questions, please contact either myself or my colleagues. Thank you.