Sharp Corp, Japan's largest maker of liquid-crystal displays, will invest ¥380 billion (US$3.2 billion) on a liquid-crystal-display (LCD) factory to help narrow the gap with Sony Corp in the US$56 billion global flat-panel market.
The company plans to construct the plant in Sakai city, Osaka prefecture, in November, with production expected to begin by March 2010, president Mikio Katayama said at a news briefing yesterday. The factory, with a production capacity of 72,000 panels a month, will initially make 36,000 units a month.
Sharp's focus on larger screens helped prices of its LCD TVs gain 4 percent in the first quarter amid an industry slump. The new factory would have lower production costs, helping bolster profitability at the Osaka-based company, which lost the top spot for the first time last year in LCD television sales to Sony and South Korea's Samsung Electronics Co.
"Sharp's LCD TV sales are not performing well in the US," said Koichi Hariya, an analyst at Mizuho Securities Co 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," Hariya said.
US Corning Inc and Japan's Asahi Glass Co, the world's top glass substrate makers, are among firms planning to work in the park, the Nihon Keizai Shimbun reported without citing sources.
By having LCD-related companies nearby, Sharp aims to improve efficiency and so better compete with Samsung Electronics and other rivals in the LCD market, the newspaper said.
The electronics manufacturer will also construct a TV assembly plant and a state-of-the-art facility for solar cells, while encouraging chemical, gas and other manufacturers to locate in the industrial park, the Nikkei Shimbun said.
Sharp will spend ¥400 billion over a few years, while parts and materials makers are likely to spend around ¥200 billion, it said.