This excerpt taken from the LPL 20-F filed Apr 16, 2008.
We sell our products to a select group of key customers, including our two major shareholders, who may no longer rely on us as a strategic supplier of TFT-LCD products, and any significant decrease in their order levels will negatively affect our financial condition and results of operations.
A substantial portion of our sales is attributable to a limited group of end-brand customers and their designated system integrators. Sales attributed to our end-brand customers are for their end-brand products and do not include sales to these customers for their system integration activities for other end-brand products, if any. Our top ten end-brand customers, including our two major shareholders, together accounted for 73.0% of our sales in 2005, 71.3% in 2006 and 73.7% in 2007. Our top three end-brand customers together accounted for 40.1% of our sales in 2005, 42.0% in 2006 and 41.8% in 2007. In 2007, two end-brand customers, LG Electronics (excluding its purchases made as a system integrator) and Philips Electronics, each contributed to 10% or more of our sales.
We benefit from the strong collaborative relationships we maintain with our end-brand customers by participating in the development of their products and gaining insights about levels of future demand for our products and other industry trends. Customers look to us for a dependable supply of quality products, even during downturns in the industry, and we benefit from the brand recognition of our customers end products. The loss of these end-brand customers, as a result of customers entering into strategic supplier arrangements with our competitors or otherwise, would thus result not only in reduced sales, but also in the loss of these benefits.
We cannot provide assurance that these customers, including our two major shareholders, will continue to place orders with us in the future at the same levels as in prior periods, or at all.