C.J. Muse - Lehman Brothers Jae Lee - Daiwa Securities Chong Kim - CLSA Evan Erlanson - Bear Stearns Tony Sandhu - HSBC Chong Kim - CLSA Luc Mouzon - BNP Paribas Ivan Goh - DRKW Christian Dinwoodie - UBS Olivier Lolly - AllianceBernstein Tan Tien - Nebski Capital

Good morning and good evening. First of all, thank you all for joining here the conference call and now we will begin the conference of the Fiscal Year 2006 Fourth Quarter Earnings Results by LG.Philips LCD. This conference will start with a presentation followed by a divisional Q&A session. (Operator Instructions). Now we shall commence the presentation on the fiscal year 2006 fourth quarter earnings results by LG.Philips LCD. Please go ahead sir.

Thank you. Welcome to LG.Philips LCD's fourth quarter 2006 conference call. My name is Daniel Kim, and I am the Vice President of Investor Relations. On behalf of LG.Philips LCD, I would like to welcome everyone to our global quarterly Earnings Call. I am joined by our CFO, Ron Wirahadiraksa; the Vice President of TV Sales, Champ Shin; and Vice President of Monitor Sales, CS Chung. We have approximately one hour for this call. We will spend the first part of the call discussing the key issues for the quarter, which correspond to the slides available on our website. Following this, we'll take your questions. Please do not hesitate to contact us after the call if you have further questions. Before we move into the discussion of earnings results, you should be aware that this conference call may contain forward-looking statements within the meanings of U.S. Private Securities Litigation Reform Act and Securities Regulations in Korea, including statements, among others, regarding LG.Philips LCD's expected future financial performance. You are cautioned that these statements may be affected by the important factors, among others, set forth in the LG.Philips LCD's filings with the U.S. Securities and Exchange Commission and in its fourth quarter 2006 earnings release. Consequently, actual operations and results may differ materially from the results discussed or projected in these forward-looking statements. LG.Philips LCD undertakes no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise. Now please take a minute to read the disclaimer. We are reporting in consolidated Korean GAAP with an appendix to this presentation that includes our reconciled US GAAP numbers. I would now like to turn this call over to Ron.

Thank you, Daniel. Ladies and gentlemen, welcome to our fourth quarter 2006 global conference call. During the next hour, I will review our earnings results from the fourth quarter, discuss our performance and conclude with the outlook for the first quarter of 2007. Following this we will take your questions. Next slide please. Before we get into the specifics of the quarter, I would like to address two issues, one that involves our company specifically and the other that involves the entire LCD industry. On December 18th, the company announced several executive management changes, most notably Bon Joon Koo, formerly President and CFO of LG Electronics, has been nominated by the company’s Board of Directors to serve as our next CEO. Mr. Koo's directorship will be voted on by the shareholders at our annual general meeting and then his appointment as CEO will be put before our Board of Directors for approval following the meeting. We have also appointed a new Chief Production Officer and a new Chief Technology Officer. Through these appointments LG.Philips LCD is transforming itself from a manufacturing centered to a customer centered organization. As you are all aware, we recently announced our Value-over-Volume strategy and reorganized the company into several business units in order to swiftly and proactively response to changes in the business environment as well as to customer needs. By emphasizing the responsibility and authority of each business units while solidifying the company’s global management capabilities, LG.Philips LCD's new management appointments affirm our adherence to this profit oriented business strategy. I am personally looking forward to working with these executives. And as all of you are aware by now on December 8th as part of an investigation into possible anticompetitive conduct in the LCD industry, officials from the Korean Fair Trade Commission visited our offices in Seoul, Korea. In addition, the Japanese Fair Trade Commission issued a notice to our offices in Tokyo, Japan, and the United States Department of Justice issued a subpoena to our offices in San Jose, California. We take this matter very seriously and we will fully cooperate with all legal and the regulatory authorities. As we said at the time, while these investigations are underway, we will continue to work diligently with our customers to provide world-class products. At this time, we have no additional information to provide and we will not comment on this further until it is appropriate to do so. Next slide please. We are encouraged by our performance this quarter and the results of the enhanced cost reduction initiatives we are implementing. We will continue applying strategies that will enable us to reduce costs, manage finished goods inventory levels, to better align with customers and support a prudent capital spending strategy. During the fourth quarter, we were able to reduce our COGS per square meter in Korean Won by 10% sequentially. In addition, we maintained finished goods inventory levels at slightly under three weeks at the end of the quarter, temporization is an option if required. Also during the quarter, we worked closely with our top customers to achieve better customer alignment. Activities we initiated this past quarter are progressing as planned and include co-design and co-location with our customers. Production at our Poland module plant, which we established in partnership with Toshiba for example, will start in February. Further, the increasing number of long-term supply agreements we have secured, reflect our continued focus on close to customer collaboration as we head into a challenging market environment in 2007. We believe that our CapEx plans are aligned to the current realities of the market, although our 2007 CapEx plan of KRW 1 trillion represents a significant reduction in CapEx from the previous year, input capacity is expected to grow through smart investment in the productivity of our existing fabs and the efficient balancing of our production lines. Although the road ahead will not be easy, we believe we have made considerable progress and expect even greater success going forward. Ultimately we plan to reestablish our leading position in this industry. For the fourth quarter, revenue was KRW 3.1 trillion, up 11% sequentially from the third quarter. This sequential sales increase was largely the result of greater seasonal demand across all segments and improving market conditions, particularly in IT. Total cost of goods sold increased 2% quarter-on-quarter to KRW 3.1 trillion, primarily attributable to increased shipment levels. COGS per square meter in US dollars decreased by 9% quarter-on-quarter and decreased 18% year-on-year in Korean Won. This represents a decrease of 10% and 26% respectively. Cash COGS per square meter in US dollars decreased by 11% sequentially and decreased 21% year-on-year. In Korean Won, this represents a decrease of 12% and 28% respectively. Quarter-on-quarter, our EBITDA margin increased by 7 percentage points to 18% and net margin improved by 6 percentage points to minus 6%. Better than guided margins were the result of considerable progress in cost reductions. In terms of cost reduction management, we are designing for costs while pursuing technology and efficiency improvements. LG.Philips LCD is also sourcing for cost through [OEM] purchasing and establishing strategic alliances with an emphasis on co-design. We are continuing to execute on our strategy to reduce costs, and expect this to moderate further price erosion in the quarters ahead. Please turn to the next slide. As of December 31, 2006, we reported KRW 954 billion in cash and cash equivalents, which represents KRW 482 billion increase over the previous quarter. This reflects our improvement in net income and the net change in working capital. Finished goods inventory turnover levels increased from just over two weeks at the end of the third quarter to slightly under three weeks at the end of the fourth quarter for large panels. This change consisted of an increase from just under two weeks to slightly under three weeks for IT and a slight increase to over three weeks for TV. Again, we are keeping close tabs on these aspects of our business and will continue working to maintain appropriate levels going forward. Total debt decreased by KRW 0.4 trillion to KRW 4.1 trillion, primarily due to efficient CapEx and working capital management. Our net debt to equity ratio as of December 31 was 46%. Please turn to the next slide. Cash flow from operations increased to KRW 1.2 trillion, mainly due to the improvement of net income and change in working capital. CapEx spending of KRW 324 billion was below our third quarter CapEx amount and consisted primarily of investments in Gen 5.5 construction, our Poland module plant, the enhancement of production efficiency and the maintenance of existing facilities. As we have previously communicated, our company has focused attention on capital spending policies and practices, which we believe current market conditions necessitate. Our CapEx strategies are part to our larger business objective aimed at returning LG.Philips LCD to operational excellence and profitability. Please turn to the next slide. Now I would like to provide more detail about several specific performance metrics. Next slide please. The average selling price per square meter of net display area shipped in the fourth quarter decreased at the rate of 1% to $1,414. Quarter end to quarter end, prices per square meter decreased 3% to $1,381. Please note that although prices in the IT segment were relatively stable last quarter, the overall in ASP is attributable to the drop in LCD TV panel prices. ASP per square meter for the fourth quarter in the TV segment fell 4% on average and 5% quarter-on-quarter end. For IT, ASP per square meter rose 3% on average and fell 2% at the end of the quarter. The total display area shipped during the fourth quarter of 2006 was 2.3 million square meters, an increase of 14% sequentially. The less than expected increase stems from lower anticipated seasonal demand in the TV segment. Next slide. Revenue breakdown by product segment for the fourth quarter is as follows. TV held at the same level as in the third quarter, accounting for 48% of total revenue. This was followed by monitors at 27%, notebooks at 21% and other applications at 4%. Next slide. P7 continues to perform efficiently and averaged 78,000 input sheets per month during the fourth quarter. Bearing capacity and future outlook in mind, we plan to ramp P7 towards 90,000 input sheets per month in the first half of 2007, in line with the demands of the current market environment. Next slide. Cash ROIC in the fourth quarter rose from the third quarter by 11 percentage points to 23%. This stems from our improved EBITDA margin, as well as an increase of sales over invested capital. Next slide. Let’s now turn to the discussion of our outlook. Next slide please. For the first quarter of 2007 we anticipate a mid single digit decrease percentage in total area shipments sequentially, where TV decreases by high teens and IT increases by mid single digit percentage. We anticipate both the ASP per square meter at the end of the first quarter of 2007 as well as the average ASP during the quarter to decline by a low teens percentage, which is the same for TV and IT. Our cost reduction per square meter is expected to be in mid-single digit percentage in the first quarter. Accordingly, our EBITDA margin for the first quarter of 2007 is expected to be a mid-teens percentage. Looking forward to 2007, we anticipate continued progress in our cost reduction efforts and expect that these strategies will reduce cost by about 25 to 30%. Our CapEx guidance for 2007 remains at approximately KRW 1 trillion. Our 2007 CapEx will be utilized for future production facilities, production efficiency enhancement and existing facility maintenance, thereby providing us with more operational flexibility. This is in accordance with our more judicious approach to capital spending and anticipation of industry-wide weakness in the first half of the year. Responding to the needs of our customers and the rapidly evolving global business environment remains a key focus of LG. Philips LCD. We believe our strategy is strong, and that the new leadership team announced in late December will further enhance the company’s global standing and business capabilities. We are encouraged by the progress we made during the fourth quarter. The coming year represents both an interesting challenge and unparalleled opportunity as we work to return to profitability. Thank you for your ongoing support to LG. Philips LCD. Daniel?

This concludes our fourth quarter 2006 earnings presentation, and we would like to now answer your questions.

(Operator Instructions). The first question will be given by Mr. C.J. Muse from Lehman Brothers. Please go ahead, sir. C.J. Muse - Lehman Brothers: Yeah, good evening. A couple of quick questions. I guess, first off, it looks like roughly 55% of your CapEx is for next-gen production facilities. Can you help us out there? Is that primarily Gen 5.5 or also additional, I guess, initial spending on Gen 8?

We have been spending on construction of P8 and that is a Gen 5.5, well that occupies part of the building. So, at this moment, the construction to show for a possible Gen 8 is ready, but we are not spending any money on Gen 8, beyond that. C.J. Muse - Lehman Brothers: Okay. And when do you think, you would be ready to make the decision as to whether you would want to add equipment this year or not?

For Gen 8, that’s not, at this moment on our horizon, because economically we don’t believe Gen 8 is a good idea, and the market doesn’t seem to necessitate a large volume supply of 50 inch and above. And the economics, as I said, are not good. And for Gen 5.5, we will probably be bringing equipment Q1, Q2, next year. C.J. Muse - Lehman Brothers: And will there be any sort of penalty to you or any problem in terms of ascertaining that equipment, I guess, given that a number of the [POs] replaced last year, and any delay there, will that cause a problem for you?

It will not. We have had sufficient discussion with our equipment vendors. As you know, we have long standing relationships with an actual understanding. So, we are keeping the slots, so we don’t expect to have any glitch in supply of equipment to us. C.J. Muse - Lehman Brothers: Got you. And I guess moving on to the cost down efforts. You talked about 25%, 30%, cost down year-over-year. Do you see that primarily in materials, or -- you also talked about co-design, also bringing production in-house and also focus on manufacturing and yields, where do you see the lion share of the savings coming from?

If I compare the comparable bill of materials in '07 against price of '06, then I can say that most of it will come from purchasing, and the second is development, and there also a fair bit will come from process improvement. And process improvement, as you know, will have the whole year of P7 ramped in a higher capacity mode, and also with a higher capacity conversion factor than in 2006. C.J. Muse - Lehman Brothers: Great, Thank you.

You are welcome.

Question will be given by Mr. Jae Lee from Daiwa Securities. Please go ahead, sir. Jae Lee - Daiwa Securities: Yes. I’d like to know the overall capacity increase for 2007, and also your TV market assumption for this year as well?

TV market.

So overall, the TV market, TV demand in the year-over-year 2007 most of research company and then TV makers are effecting about the 66 to 68 million unit. There is a TV set demand. So also we have a similar numbers currently, so they are probably, the penetration rate for our overall TV market will be more than 30%, this is what we are expecting as of today.

And as for the capacity expansion it's about little more than 30%. Jae Lee - Daiwa Securities: Alright. And how about the TV segment breakdown during the first quarter, could you do that by, like volume and value for like 30-inches and 40-inch displays?

For fourth quarter -- first quarter, it was about 35% larger than 40-inches, and then approximately 50%, 30-something inches, 32 and 37-inches, and then the other portion is smaller sizes. Jae Lee - Daiwa Securities: Okay. Thank you very much.

Okay. The following question will be given by Mr. Chong Kim from CLSA. Please go ahead, sir. Chong Kim - CLSA: I had a question on your depreciation charges going into the rest of the year. I think you had mentioned in the previous call, one of your Gen 5 facilities would stop; your deprecation stops sometime in the year. Could you tell us when, which quarter, and the amount the deprecation you think will start to decline?

Yeah. So the total depreciation for this year is about 2.7, about KRW 2.7 trillion, and the Gen 5 will mostly run out of depreciation in -- starting in Q2. As you know, we are ramping fabs usually in 9 to 12 months, so in the coming quarters also the amount will come down a little bit more. Chong Kim - CLSA: So, could -- is there any way, you could give us a little more specificity on the number or what the Gen 5 depreciation charges have been historically?

Yeah. So, in last year Gen 5 was about KRW 315 billion, and this year it will be about half. Chong Kim - CLSA: A half of that. And one of my last question, do you have any plan at this moment for another equity issuance?

No. We have no plans at this moment. Chong Kim - CLSA: Thank you.

You are very welcome.

The following question will be given by [Mr. Evan Erlanson] from Bear Stearns. Please go ahead, sir. Evan Erlanson - Bear Stearns: Yes. Thank you, guys. I saw that the 7.5G fab was running at 78,000 input sheets by the end of the year. So what does that mean in terms of ramping up to the 90,000 input capacity in term of timing Q1 or Q2?

Yeah, actually the 78,000 was the average for the quarter, but at the end of the month it was lower. So, the 90,000, as I’ve said, will likely depend on market circumstance before turnover, for that to be say end of Q2. Evan Erlanson - Bear Stearns: Okay.

Yeah. Evan Erlanson - Bear Stearns: And in term of the CapEx and the timing that we can expect for 2007, is it going to be front-end loaded, back-end loaded?

Yeah. It’s a little bit front-end loaded for this year. And that is because, we are still executing on orders that we have placed for which we are paying, and in some part that we have on credit at the end of this -- sorry, at the end of last year. So, yes, it’s mostly front-end loaded, first half. Evan Erlanson - Bear Stearns: Okay. And finally on the capacity conversion factor, given the slowdown that we expect in Q1, there was a little bit of a decline I think in Q4. How do you think that’s going to trend through the first couple of quarters of the year?

Well, we should see an improvement, because the P7 is still getting [ungainly] better in the CCF. So, we will see that probably go up throughout the quarters in ’07, because we are not ramping any new fabs. So, there is no reason why the productivity as indicated by CCF would not improve. I am looking at -- if you hold on one second, see where was the CCF, here. So at the end of in Q4, over Q4, it was little under 65%, and we expect to bring that up, I think, throughout the year to -- should be going over 70% in Q4 of this year. Evan Erlanson - Bear Stearns: Okay. Great. Thanks.

Welcome.

And the following question will be given by Mr. Tony Sandhu from HSBC. Please go ahead, sir. Tony Sandhu - HSBC: Yeah. Thanks, Ron, for taking my questions. A couple of questions here. First, I just want to talk about this CapEx in your comment that current market conditions don’t dictate a higher CapEx, but the CapEx number covers the whole of 2007, and so -- and the amount of the time it takes for CapEx to actually have an impact on capacity, so what you are saying in essence is that until the middle of ’08, you don’t see any requirement for any -- in the industry for a large amount of new capacity?

What I am saying is, and what I said before that the Gen 8 at this moment for us is not economically feasible, I said that a few times. Tony Sandhu - HSBC: Right.

Not only this time, I mean, but before, and the market for this is probably not that big, but we are building a Gen 5.5. And this year’s capacity expansion comes from higher input sheets mainly in P7, and increased capacity conversion factor. So, we intend to squeeze more out of our factories, because this is the first time that you heard me talk about CCF. They were target in above 70%. Tony Sandhu - HSBC: Right.

So we are doing our best to optimize the equipment as much as possible, and be as productive as possible. Tony Sandhu - HSBC: Okay. So I mean demand, some of your competitors said like demand that it’s going to grow at area terms 40%, your capacity is up 25%, 30%. So, you’re quite comfortable with kind of letting the industry carry the burden for 2007, and you’re quite happy to -- with your value over volume strategy, I guess, for this year?

We need to focus on value more than on volume. So, I think, this is also given by prudency, and we like to retain a strong balance sheet to have options to choose from, if the times get tougher. I don’t know our market demand, maybe Champ, do you want to comment more or CS?

For area base on the total market demand, it would -- may grow by about 40%. So, just our capacity will grow more than 30%, so even though our CapEx is or are seems to be a relatively smaller than the average compared to as than the other years, but they took forth the demand. We do not think there are any issues through the year.

So, you before, because you referred to the capacity, that’s what I was asked before that. It was not 25% to 30%. It was over 30% capacity growth, but because we are also being more productive, shipment growth is more like 50%, so we are there, we think, with enough volume growth. Tony Sandhu - HSBC: Alright, okay. You just made a comment that you like to keep a strong balance sheet, and so there was a marked improvement in the fourth quarter in terms of cash generation. I saw that inventories came down, what else was in that KRW 500 billion that was contributing to the working capital?

We have sold slightly more of AR receivables than we did in Q3. It's about $200 million more, and we had some bills that we put on credit in a very natural way. So that helps a lot, plus the inventory improvement. Tony Sandhu - HSBC: Okay. So the AR actually went up a little bit. So it was actually mostly inventories and account payables?

No, sorry. What I'm saying is we sold more AR, going forward. Tony Sandhu - HSBC: Okay.

I'm sorry not to make that clear. Yeah. Tony Sandhu - HSBC: Alright, so AR is 200, inventory about 100, and some account payables about another close to 200, so that’s up 500. Okay.

That’s about it. Tony Sandhu - HSBC: You think this is like a one-off thing, or do you think we should -- if you can squeeze a little bit more over there?

Well, we are going in a difficult quarter, so inventories, we’ll keep a keen eye on inventories. We always said we’ll temporize, if it goes to four to five weeks, probably at four weeks, we'll start to temporize. It's now a little under three weeks, but if it’s a little over three weeks within that overall situation, I think, the channel and customer inventory looks pretty okay. So there is not too much concerns there. So probably we'll be able if we have disciplined production to keep our inventories at the seasonal right level. Tony Sandhu - HSBC: Okay, great. That brings me to my next question on utilization rates. I saw that area shipped for you grew 14%, capacity grew 17% and you also drew down on some inventories. So is it correct to assume that you dropped utilization rates in December or is that a wrong conclusion?

Yes, the utilization dropped slightly, mainly in P7. As I said, those are the loading rates went down. So that is correct. Tony Sandhu - HSBC: Okay. And I was trying to clarify that other answer as well, so the capacity -- installed capacity is 90K but you are running at an average of 78K on the 7.5G?

The installed capacity is more closer to about 80K -- Tony Sandhu - HSBC: Okay.

And we are going to bring that to 90K, as I said, somewhere in the second quarter Tony Sandhu - HSBC: Okay

And if the outlook for second half is very strong, we could think of ramping that further. Tony Sandhu - HSBC: Okay. So there is some leeway in that CapEx number of second half that means?

No that would included. There is no -- Tony Sandhu - HSBC: Okay

Don’t expect to spend more CapEx other than we anticipated, yes. Tony Sandhu - HSBC: Okay. So in December you think this is running around 75K this fab?

Yes, around 74, 75K, that’s right. Tony Sandhu - HSBC: And do you think you are going to increase that all in the first quarter or that’s -- you actually probably need to decrease it, because you are forecasting seeing 5% drop or so in area?

Yes, exactly. So try to keep it flattish to slight reduction. And also we intend to produce more monitors in the Gen 7 line. Tony Sandhu - HSBC: Okay. Pricing, you said first quarter mid teens drop. Do you want to take a guess on the rest of the year? What do you think, Ron, pricing does gets weaker in the second quarter and then is there going to be a bounce back in later on in the year. What are you thinking?

This is CS Chung. I am in charge of monitor side, and as you say, first half is always weak and second half is strong. So, now we are expecting in Q1 and Q2 maybe price down round 10% each, but I think Q3 is going to be balanced and Q4 is going to be tight. So, we also expect the price to rebounding around Q3 -- from Q3. Tony Sandhu - HSBC: Excellent, thank you. Just one last question, I wanted to lot of questions. But this last question is, Ron, for you. You are pursuing this customer oriented strategy. You have a JV with Toshiba. You want to provide them the panels that they need, and what happens if they need 52-inch panels and you don’t have an 8G. What do you -- what’s your answer to Toshiba then in that case?

Probably I may answer you. Tony Sandhu - HSBC: Yes sir.

Even though we are not investing the Gen 8 fab, but we are developing the 52 inches and then the largest screen size in our previous -- in our current fab. So, to meet the customers' requirement that you said, we do not have any problem, because we are -- we are developing and then we are -- we are on a [process] endorsement for the larger screen size modules in our previous fab. Tony Sandhu - HSBC: Okay, thank you, thank you very much for that. Thank you.

Thanks.

Sir, the following question will be given by Mr. Chong Kim from CLSA. Please go ahead sir. Chong Kim - CLSA: Just a clarification on the Poland module factory. When did you say that that would begin production?

It will be -- it will be in production from the end of February, as we have stated. Chong Kim - CLSA: End of February. And just a follow-up question. From that point in February, will you be shipping as well -- will you be shipping to Toshiba as well as that part of the schedule?

According to the customers' requirements, we will provide our product from Poland according the customers requirement. So, in the event that with not only Toshiba, but we have need to supply to customers such as Philips and LG Electronics in Europe also. Chong Kim - CLSA: Okay. And my last question is a follow-up I think on the question about demand going into the first quarter of the year on televisions. I think some of your competitors are talking about how demand is picking up in January, and given how surprisingly strong some of the retail sales were towards the very end of the holiday season with price cuts, some of them are coming back to replenish. Are you -- is that something you are also seeing or is that maybe a competitor specific phenomenon?

I may not be in position to tell about the other companies forecast, but they -- in this TV industry has a kind of a typical seasonality. Most of our fourth quarter demand have used to drop from the previous quarter, so more than 20%. But since we have some strong relationship with the customer side, we have had some pre-confirmed volume, so even though their market has more than 20% dropping of the demand, but we are expecting high teens dropping of our shipment. Chong Kim - CLSA: You don’t think that the combination of Chinese New Year plus the fact that unlike existing technology that TVs, there may be some structural forces that work to keep volumes pretty buoyant or flat going into the first quarter? You don’t see anything like that at this moment?

No, I don’t think so. But -- and then the Chinese Lunar New Year, those kind of things already Chinese TV maker has prepared it from December timeframe. So, those kind of lunar New Year event is therefore (inaudible) huge demand though. Chong Kim - CLSA: Okay, thank you.

And currently there are no participants in the questions. (Operator Instructions). The following question will be given by Mr. Mouzon from BNP Paribas. Please go ahead sir. Luc Mouzon - BNP Paribas: Yes, hi, good afternoon. Just a question about the laptops and the PC monitor market. Could we anticipate that the guidance you gave for the first quarter could come across the full year, which means that this market will continue to grow between mid teens and, I would say, high teens? And the second question is regarding pricing in this market. Do you see or do you confirm -- could you confirm that the pricing has been, let’s say, stabilizing for 19-inch and basic standard product for PC monitor by the fourth quarter?

Demand-wise, the last year was 125 to 130 and this year we guess is 145 to 150, so demand growth is going to (inaudible) and even 2008 we guess the demand growth is going to be over 10%. So, still we are expecting a CAGR about 2010 -- is around 10%. So, there is a demand, even though there are no probable place very high spear with the desktop, we expect 10% CAGR over the coming five years. For the pricing, even though we are churning out more, but the [IT] demand is coming up, so there will be price dropping anyhow. This is very natural downtrend. In the first half we are going to see more -- see the price drop and second half we will see the prices rebounding. I think we are going to go through the very natural seasonality this year too. Luc Mouzon - BNP Paribas: Okay. And then a follow-up just -- some forecasting the mix for the TV panels, how much do you expect the 14-inch and over category to representing in 2007 on a full year, is that scaled up 45 to 50%?

It's --

Probably then not easy to tell you their portion with portion over revenue, but I may tell you the portion of unit base probably over -- there were larger 40-inch -- equal to or larger than 40-inch category would be about 20 to 25% market share out of a total 66 or 68 million units. Luc Mouzon - BNP Paribas: Okay. Thank you very much.

Welcome.

And the following question will be given by Mr. Ivan Goh from DRKW. Please go ahead sir. Ivan Goh - DRKW: Hi. Just one clarification and then another question. The clarification question is, did you say what the depreciation -- expected depreciation would be in the first quarter?

I said for the year it is KRW 2.7 trillion. Ivan Goh - DRKW: Thank you. And have you got that number for Q1?

It's -- I think should be more or less evenly spread. So by quarter, it will be four quarters around 700 billion. Ivan Goh - DRKW: Okay. And one question is on full HD. I wanted to find out what percentage of your shipments in the fourth quarter were full HD and how do you expect that spec to evolve in 2007?

Since we had started to ship our full HD version the -- from the middle of last year. So, our [lending] in the last quarter was not that much big. But the trend of full HD is -- has a -- seems to be a bit growing this year. So, probably second half of this year some of our largest screen sizes full HD portion may be half of total demand of such larger screen sizes. Ivan Goh - DRKW: Is there a margin difference within full HD and just HD currently for you?

What does it module margin?

Margin -- Ivan Goh - DRKW: Profit margins.

Yes, yes it has, because there is some price premium and also there is cost difference we have. So at the time the margin structure comparison between full HD and HD has some differences. Ivan Goh - DRKW: Would you be able to disclose like how many percentage points difference than, say, operating margin or gross margin between the two for a similar size panel?

I think I am not in position to tell you about that. Ivan Goh - DRKW: Okay, that's fine. Thank you very much.

And the following question will be given by Mr. Christian Dinwoodie from UBS. Please go ahead sir. Christian Dinwoodie - UBS: Thank you. I just wanted to check on the status of the shift to the business New Year strategy. If you could talk a little bit about where you are have seen successes so far and where you are expecting some successes in '07?

I think one of the first success is, the focus on cost down is -- has been intensified with the result that 10% cost of goods sold decreased square meter basis quarter-on-quarter. Actually cash COGS was about 12% down, so we are very encouraged by that. We see at this moment the business units very successfully undertaking focus that they should have on the respective lines of business that they are taking charge of. And in TV we are fortifying the [view] very strongly to make sure we have enough capability to execute an accelerated cost down program. And we are seeing already -- we introduced in December first lower cost models, not low end, but lower cost models for existing product lines and that is particularly encouraging. In terms of reviewing the supply base, of course, this takes a little more time, but we are convinced that not only global or overseas sourcing will be increased as we elaborated on in last quarter earnings event, but also the existing supply base can be more to supply LPL with more support. We are particularly encouraged by that. We also feel that under the more constrained CapEx budget, our efforts to still increase volume and to be more out of the existing capital base are quite successful and actually above 70% CGS for us is the first time we are communicating that. We are encouraged by that too. In terms of customer base, of course, now we are seeing that Philips and LGE are accelerating and becoming more aggressive in selling the 42-inch and we are very encouraged by that too. And we have also mention of the conclusion of number of LTAs with some other customers, like the Chinese and two other overseas customers which -- so the LTA accounts for about in TV about 25%. So, that is particularly good for seeing the fact that we are going into a quite challenging year. Of course, with the new leadership team in place and particularly a new CEO, we are picking up on the initiatives that we have already started, plus a number of further reviews on how to best optimize our product mix, and come as soon as possible to restoring profitability in LPL. And I think, if I look at the direction at the moment and what we can expect going forward as a result of these efforts that will be good of course. We are doing this in the first half that is always particularly challenging, and we have communicated mid-teens EBITDA margin for the first quarter. We have also communicated 25% to 30% cost down for the whole year, which is significantly higher than we have done last year, and that is to be able to combat the ongoing price erosion that the gentlemen here just also described for you in a better way. So I think, at this moment, as I said during the Analyst Day, the strategy of the company is more closer collaboration with customers, a different way to look at cost management, more process, increasing the process capabilities of LPL, and becoming more asset light. We are now looking at more overseas mobilization, and it doesn’t have to be through our own factories. Looking particularly at China for example, and reviewing the business model somewhat. Christian Dinwoodie - UBS: Thank you.

Okay. The following question will be given by Mr. Jae Lee from Daiwa Securities. Please go ahead, sir. Jae Lee - Daiwa Securities: Yes. Just to clarify the inventory level please. I guess, you mentioned that the finished goods inventory level at the end of 4Q was slightly under three weeks. And I think at the end of third quarter, you’re saying the inventory level was slightly over two weeks. So, did the decrease in inventory amount came from the reduction in the goods in work in process?

No. The reduction came mainly from the finished goods inventory. Jae Lee - Daiwa Securities: Okay.

So that’s what we are --- when I communicate those numbers to you -- Jae Lee - Daiwa Securities: Right.

We are talking usually about as we clarify finished goods inventory. Jae Lee - Daiwa Securities: I see. Thank you.

Okay. The following question will be given by [Mr. Evan Erlanson] from Bear Stearns. Please go ahead, sir. Evan Erlanson - Bear Stearns: Hi, again. I wanted to get a sense of given the 5.5G fab potential launch towards the end of year, or maybe early ’08, and also the capacity you have in place. What do you think your market share is going to be in widescreen format, monitor and notebook screens in 2007, and then probably going to ’08, given that that’s a very profitable segment to be in, and also give other expansions that are going on? And the second question is in terms of the CapEx, how much of the CapEx in ’07 is going to be devoted to de-bottlenecking of existing fabs, and also how much capacity of that 30% plus capacity expansion that you expect in terms of input in ’07, how much is going to be attributable to de-bottlenecking versus new -- like new capacity for the 7.5G fab and so on?

For the wide, the size of a monitor, I will answer. This year [we’ll get some wide size] for the monitor is around 30%. And every year, that will increase by 10% each, so by the year of 2009. I think, it’s going to like 50%.

Does that answer, your question on the monitor side? Evan Erlanson - Bear Stearns: The 50% would be the -- that’s a growth rate or that’s a market share?

The portion of the total, the monitor. Evan Erlanson - Bear Stearns: Okay, yes. I think, I was asking more as to what your share of the market would be?

Our share? Evan Erlanson - Bear Stearns: Yeah.

I think, our share is going to be same as the portion of the market. Evan Erlanson - Bear Stearns: Okay, thanks.

And then on CapEx, well in P7, I said, we are adding some capacity, but a lot of the capacity increase, and input capacity is coming from that. I would say more or less, I think, perhaps both capacity increase and de-bottlenecking contribute more or less equally to the increasing capacity. Okay. The 30% that I mentioned. Evan Erlanson - Bear Stearns: Okay. So, equal percentage of both CapEx and also capacity increase?

Yeah. Evan Erlanson - Bear Stearns: Great. Thank you.

Okay. The following question will be given by Mr. [Olivier Lolly] from AllianceBernstein. Please go ahead, sir. Olivier Lolly - AllianceBernstein: Hi. Just on the clarification questions. The capacity increase by areas for 2007 would be along more than 30%, and the shipment would be grown by more than 50%, is that right?

Yeah, that’s correct. Olivier Lolly - AllianceBernstein: Okay. And my second question is can you just give me the input of the Gen 5.5 starting from the second quarter, and how did it look like in the fourth quarter, and the input would be?

No. Actually, I am sorry, if I wasn’t clear on one of the previous questions. But the Gen 5.5 ramp is you probably beginning in Q2 next year, not this year. Olivier Lolly - AllianceBernstein: Okay. So, this year would be focused on the P7, 90K…

That’s correct. Correct. 90K and somewhat beyond that, if the second half looks promising, and furthermore the productivity improvement. Olivier Lolly - AllianceBernstein: Okay. Okay. Thank you.

You are welcome. Olivier Lolly - AllianceBernstein: And how is the -- sorry, the last line is, how is the capacity for the 5.5 generation?

The initial input capacity will be 30K. Olivier Lolly - AllianceBernstein: Okay.

And then we will ramp it probably in three stages to 90K. Olivier Lolly - AllianceBernstein: Okay. Thank you.

Yeah. Thank you.

Okay. The following question will be given by Mr. [Tan Tien] from [Nebski Capital]. Please go ahead, sir. Tan Tien - Nebski Capital: Hello, good evening. My first question is just for clarification. Your area shipment guidance was for a mid-single digit decline, and did I hear you correctly, you said that TV shipments would decline by a high-teens percentage, and IT panels by a mid-single digit percentage, was that right?

That was correct. Tan Tien - Nebski Capital: Okay. In that case, how does the total shipments add up, because you are looking for a mid-single digit decline in overall shipments. But, I would assume that if TV declined by a high-teens percentage, then overall shipments would decline more like 10%?

Actually, it’s funny that you asked it, I have exactly the same consideration, but I double checked the numbers, it’s very true, because at this moment, IT is still a bigger portion in square meters, than TV. So, the fact that IT increases actually contributes to that. I fully understand your question, but it’s really a calculated number. Tan Tien - Nebski Capital: Okay. Okay. So for your IT panels did you say it was a mid-single digit increase or decrease?

Increase. Tan Tien - Nebski Capital: Increase?

Yes. Tan Tien - Nebski Capital: Okay. Okay. Thank you. And just a follow-up question, it seems like your fourth quarter TV shipments came in a lot below what you were originally expecting and you guidance for -- again for Q1 is for quite a significant decline. Is this a reflection of what the current TV market demand is, or is it simply a switch of your focus perhaps towards higher margin IT panels?

If we go back to the last quarter, we had a very [deep equation] to some of our major customers to bring our 40-inch and then the larger screen size for the year-end sales. But their performance was not as much as we expected. That's why we couldn't reach the shipment as we expected to at the end of Q3 last year. This quarter, both the -- since most of our customers has a very healthy inventory level, and then some of them had a great job in managing their inventory level at the end of the year, so most of our focus for this quarter is based on our customers’ focus, and then this time, we didn't add up our expectation on top of that. So, the shipment focus for this quarter is we think is most of our IT things as of today.

And also, please bear in mind, that seasonality of TV is typically like one-third, two-third, first half, second half. So even though TV is of course a growing segment, due to seasonality there is always some downward bias to the numbers. Tan Tien - Nebski Capital: Okay. Thank you very much.

Okay. We will take one or two more questions.

Currently there are no participants with questions. (Operator Instructions). So far we do not have any participants with questions.

Okay. In that case, on behalf of LG. Philips LCD, we thank you for participating in our fourth quarter earnings conference call. If you do have any further questions, please call me or my colleagues and we'll answer to your questions truthfully. Thank you.

Thank you very much. Goodbye. Bye-bye.