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Sharp shares rise on back of flat-screen dominance

"Sharp's No. 1 position in small-sized screens and focus on the more expensive areas such as those for TVs at its larger-sized panel business is easy to understand and appreciate."

Keita Wakabayashi, analyst

Shares of Sharp Corp, Japan's biggest maker of liquid-crystal displays, rose 3.6 percent as investors bet the company's dominance of the flat-panel television market will lift earnings.

The gain also followed a Nihon Keizai newspaper report that said Osaka-based Sharp last month increased monthly production of liquid-crystal display panels by a tenth to 110,000 units, allowing it to make the equivalent of 40,000 more 20-inch TVs. The newspaper report reiterated plans Sharp outlined in January.

The maker of Aquos flat-screen televisions is locked in a battle with South Korean and Taiwanese rivals such as Samsung Electronics Co and Quanta Display Inc (廣輝電子) to be among the first with advanced factories to produce larger glass panels at lower cost.

Sharp's investments may keep it ahead of rivals, analysts said.

"Sharp's No. 1 position in small-sized screens and focus on the more expensive areas such as those for TVs at its larger-sized panel business is easy to understand and appreciate," said Keita Wakabayashi, an analyst with Mito Securities Research Institute.

Samsung Electronics intensified the battle last week when the South Korean company said it will spend 20 trillion won (US$17 billion) over the next seven years on new plants and equipment.

Meanwhile, Sharp is also facing competition in Taiwan, where manufacturers have begun pouring money into new flat-screen plants.

At least four companies in Taiwan -- AU Optronics Corp (友達光電), Chi Mei Optoelectronics Corp (奇美電子), Quanta Display and HannStar Display Corp (瀚宇彩晶) -- this year are opening some of the world's first so-called fifth-generation factories that can make screens for televisions that measure 30 inches diagonally and larger.

The new plants are helping cut costs by increasing the screens that can be made from a single plate of glass material.
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