Sharp Plans $3.2 Billion LCD Plant

Sharp, the second-largest Japanese maker of liquid crystal displays, will invest ¥380 billion, or $3.2 billion, on an LCD factory to help narrow the gap with Sony in the $56 billion global flat-panel market.

The company plans to start building the plant in Sakai, a city in Osaka prefecture, in November, with production expected to begin by March 2010, the company's president, Mikio Katayama, said at a news briefing Tuesday.The factory is to have a production capacity of 72,000 panels a month, but will initially make 36,000 units a month.

Sharp's focus on larger screens helped prices of its LCD televisions gain 4 percent in the first quarter amid an industry slump. The new factory would have lower production costs, helping to bolster profitability at Sharp, which lost the top spot for the first time last year in LCD television sales to Sony and Samsung Electronics.

"Sharp's LCD TV sales are not performing well in the U.S.," said Koichi Hariya, a Tokyo-based analyst at Mizuho Securities who has a "hold" rating on Sharp. "The company is sandwiched between branded LCD TV makers such as Sony and Samsung, and cheaper non-brand producers."

Sharp plans to build the assembly plant for LCD television, and another factory for solar cells, in an industrial park occupying 120 hectares, or 360 acres, of land, according to an earlier report Tuesday carried by the Nikkei newspaper. Makers of LCD materials will invest about ¥200 billion in the park, the report said.

Corning and Asahi Glass, the world's two biggest makers of glass substrates used for LCD panels, plan to build factories in the park, Nikkei said. Dai Nippon Printing intends to build a facility to supply color filters used to produce display panels, the newspaper reported.

Sony, the world's second-largest consumer electronics maker, overtook Sharp and Samsung last year to secure the top spot in the global LCD television market for the first time, according to market researcher NPD Group.

Sony had a 16 percent share of LCD television sales last year, followed by Samsung with 15 percent. Sharp slipped to third place with 11.5 percent.

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