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Philips Electronics cannot meet demand for its top of the range LCD television sets because of production problems with display panels, the consumer electronics to medical systems company said on Monday.

The panels, the key ingredient of any liquid crystal display television set, come from LG.Philips LCD, a joint venture with LG Electronics.

"Yes there are back orders due to low production yields. Yield is the issue. It is related to whether or not the panel is what we consider our standard," a Philips spokesman told Reuters.

Expensive LCD models have the highest profit margins and generate most of the income of consumer electronics. Philips declined to say if the shortfall would impact first quarter earnings, but said supply would meet demand in April.

"They're going to be spot on for next month," the spokesman said.

The shortages apply to Philips' top LCD models in the 9830 series that come in the sizes 32, 37 and 42 inch. They have retail prices between 2,300 and 5,000 euros ($2,740-$5,970).

Television sales generate much of Philips' consumer electronics sales. The consumer electronics unit generates about one third of the total 30 billion euros a year revenues of the electronics conglomerate, which is also the world's biggest lighting maker and Europe's number three in semiconductors.

By April, the 9830 series will start to be replaced by the successor series called 9831 built partly on the same chassis.

Philips said yields were more sometimes an issue, especially with new products.

"We're very particular about quality. Regrettable as this is, we make sure that products are of the absolute best quality," the spokesman added.

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Source: VARBusiness

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