Fri, Jan 10, 2003 - Page 11 News List

Sharp plans to boost spending

ELECTRONICS The company needs to increase its liquid-crystal-display production in an effort to improve its economy of scale and lower prices to remain competitive

BLOOMBERG , OSAKA, JAPAN

Sharp Corp, Japan's biggest maker of liquid-crystal displays, said it will spend a fifth more on new factories and equipment next fiscal year in a bid to stay competitive with rivals in South Korea and Taiwan.

Sharp will increase capital spending in the fiscal year beginning April 1 to Japanese Yen 178 billion (US$1.50 billion), up from Japanese Yen 147 billion this year, President Katsuhiko Machida told reporters in Osaka, where he delivered Sharp's annual outlook.

The Osaka-based company needs to boost production of liquid-crystal displays, its main product, to compete with larger rivals such as LG Philips LCD Co and Samsung Electronics Co of South Korea, which have begun operating new display factories known as fifth-generation plants. The newer production lines are capable of processing larger glass sheets, lowering costs because more displays can be produced from a single piece of glass.

To build new display plants, Sharp will spend Japanese Yen 108 billion on investments in liquid-crystal displays. The company will spend between Japanese Yen 10 billion and Japanese Yen 15 billion next fiscal year on semiconductors used in digital cameras and mobile phones.

Sharp will use its own cash for the expansion, Chief Financial Officer Hiroshi Saji said .

The maker of Aquos brand liquid-crystal display television sets will invest Japanese Yen 60 billion to build its most advanced flat-panel display plant, which it plans to start operating as early as January next year, four months ahead of schedule.

The company will spend Y40 billion on a factory for small-size flat screens, which will begin production in June, also four months earlier than planned, according to Saji. Both plants are located in Mie prefecture, western Japan.

At its chip business, the company will boost production of imaging components known as charge-coupled devices and complementary metal oxide semiconductors, which are in short supply because of the surge in demand for digital cameras and cell phones with built-in cameras. CCDs and CMOS chips produce images by processing light into electrical pulses.

Sharp also plans to invest more in flash-memory chips, which are used in cellphones and other mobile devices. Flash memory is a type of memory chip able to store information even in the absence of an electric charge.

Additionally, Sharp will begin selling mobile phones with built-in cameras in China, Taiwan and Hong Kong this year, Machida said. It will supply 50,000 camera phones to Taiwan's Far Eastone Telecommunications Co (遠傳電信) and 20,000 units to SmarTone Telecommunications Holding Ltd of Hong Kong starting in March.

Sharp was the world's first mobile-phone maker to introduce handsets with built-in cameras. The handsets have helped boost mobile-phone demand and revenues at service providers.

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