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Nitto Denko Cuts Shipment Forecast on Tablet Computer Slowdown

Dec. 17 (Bloomberg) -- Nitto Denko Corp., the largest maker of optical films used in liquid-crystal displays, cut its projections for panels used in tablet computers.

Industrywide unit shipments will probably rise 22 percent in the year starting April 1, compared with the company’s earlier estimate of about 30 percent growth, President Yukio Nagira said in an interview yesterday at Nitto Denko’s headquarters in Osaka, Japan. The company also cut its industrywide growth estimate for the fiscal year ending March to 51 percent from about 60 percent, he said.

Weaker demand for materials used in smartphone displays and tablet panels contributed to the company reducing its net income forecast by 27 percent for this year, Nitto Denko said Dec. 11. It was the second revision this quarter by the supplier to Samsung Electronics Co. and Apple Inc., sending its shares down 19 percent the next day as brokerages including Daiwa Securities Co. lowered their rating on the stock.

“The problem is in the tablet market,” Nagira said. “Demand has weakened, though the market is still growing. Our forecast was maybe too bullish, too.”

Global shipments of tablet computers will probably rise 54 percent to 221.3 million units this year, researcher IDC said Dec. 3, reducing its earlier projection of 227.4 million. The annual growth rate will probably slow to less than 10 percent by 2017, IDC said.

Nitto Denko plans to trim costs and focus on developing new materials for information devices, Nagira said. He declined to elaborate on the earnings outlook for the next fiscal year.

To contact the reporter on this story: Masatsugu Horie in Osaka at mhorie3@bloomberg.net

To contact the editors responsible for this story: Michael Tighe at mtighe4@bloomberg.net; Young-Sam Cho at ycho2@bloomberg.net

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