Sharp to invest $1.9 billion in advanced LCD plant

Sharp will construct a new factory capable of handling the largest-ever sheets of glass used to make LCD (liquid crystal display) panels. The factory will help the company meet rising consumer demand for large-screen flat panel TVs while also driving down production costs, Sharp's president said at a press conference in Tokyo on Wednesday.

The Osaka-based company will spend YEN 150 billion (AUD$1.9 billion) on the factory, which is expected to start producing glass panels in October 2006 using a so-called eighth-generation process that handles sheets measuring 216 centimeters by 240 centimeters, said Katsuhiko Machida, Sharp's president.

A single sheet of glass that size can produce eight panels of 40 inches to 49 inches in diagonal, or six panels of 50 inches or bigger in diagonal, Machida said. (The industry still gives screen sizes in inches, even though it uses the metric system for the sheets of glass used in factories. One inch is equal to 2.54 centimeters.)

Cutting more panels from larger sheets of glass costs less than using several smaller sheets, according to Sharp and other LCD makers.

By making such big sheets and improving the manufacture of the electronics needed to turn them into TVs, Sharp believes it can reduce the costs of LCDs to compete better with plasma display panels, which are more commonly used for flat-panel TVs with screen sizes over 40 inches, Machida said.

"We are facing fierce competition from plasma TVs. We will improve our production processes and we will slash costs," Machida said.

Plasma TVs are made by a different process and are cheaper to produce because, unlike LCDs, they don't require a backlight.

"If things go according to plan, by 2008 we can cut costs to about those of plasma TVs, but offer people the quality of an LCD," Machida said, without quoting figures.

Prices for LCD TVs with screens of 40 inches to 45 inches could fall from about double the prices of plasma TVs currently to about the same price in 2008, according to market research company iSuppli Corp.

Sharp will concentrate on making panels for 40-inch and 50-inch TVs because of expected demand for these sizes.

Construction of the plant, in Kameyama City, Mie prefecture in western Japan, will begin in July 2005 and the factory will start monthly production of 15,000 sheets in October 2006. Production will double to 30,000 sheets each month in mid 2007 after completion of a second line, according to the company.

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