Sharp on course for huge losses, ramps up production of rumored Apple screens

The Japan firm is investing heavily in IGZO screen technology, rumored to be favored by Apple, but losses are deepening

Japanese display maker Sharp said Thursday it is ramping up production of a screen technology rumored to be favored by Apple for its new devices, even as its yearly outlook plunged toward another large fiscal loss.

The Osaka-based company, one of the world's largest makers of LCD screens, said it will invest ¥12 billion (US$150 million) to build up its production capacity for IGZO (indium, gallium, zinc) display technology, which analysts and media reports have said will be used by Apple in its upcoming devices, including an upcoming update to the iPad. Last month Sharp finalized a deal in which it sold half of a core LCD factory and a nearly 10 percent stake in the company to Hon Hai Precision Industry, the parent company of Foxconn Electronics, a main manufacturer of Apple products.

Sharp says that the new displays cut power consumption by up to 90 percent and allow for far greater detail at the same transparency, keys for prolonging the battery life of portable devices, where screens are a major power drain. The company said it began mass production of IGZO screens in April.

The company is hoping such advanced technologies will eventually lead it back to profitability, but said Thursday things will get worse before they get better. Sharp now expects its loss for the fiscal year through March 2013 to be ¥250 billion, over eight times worse than it did just three months ago. The company said that in addition to its outlays for the new screen technology, it is spending heavily to restructure its business after a heavy loss last year, and is dealing with falling sales in Japan in China as well as overstock.

Sharp said that for the April-June quarter, it booked a loss of ¥138.4 billion, nearly triple that from a year earlier, as sales slipped 28 percent.

The company saw unit sales of its flat-screen TVs, which it markets under the Aquos brand, increase, but competition continued to drag down prices as well as its revenue and profit. It also saw an increased loss at its panel business, which sells to outside TV and electronics manufacturers.

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Jay Alabaster

IDG News Service

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