Sharp Posts Good Fiscal Year, Outlines '07 LCD TV Strategy

By Greg Tarr and Steve Smith On May 7 2007 - 6:00am




Sharp Electronics reported higher net sales and income for its fiscal year, ended March 31, based on the strength of its flat-panel TV sales and outlined its expansion plans for LCD for the upcoming fiscal year.

Sharp reported sales of $26.4 billion, an 11.8 percent gain over the previous fiscal year, and net income of $858.1 million, a gain of 14.7 percent.

In its financial report Sharp said its consumer/information products group's sales of what it calls "audio/visual and communications equipment" were $11.7 billion for the fiscal year worldwide, a gain of 26.6 percent, again due to large scale LCD TVs and also mobile phones. Home appliance sales were $2.02 billion for the fiscal year, up 6.4 percent, and information equipment was $3.7 billion for the year, up 4 percent, due to digital full-color MFP sales increases.

Sharp revealed in its financial statement that it is on track to complete the third phase of its LCD production expansion in July, when it should "double current capacity to 60,000 sheets" of LCD substrates per month.

At the same time, the company will soon begin LCD TV assembly at its current LCD module factory in Poland. Around the same time a second new production plant, which will handle everything from module production to final set assembly, will also go online in Mexico, Sharp said.

Sharp said it hopes to decide by this summer if it will proceed with a proposed new production facility for large-size LCDs.

The company started the second phase of expansion at its Kameyama No. 2 plant in January, expanding substrate input capacity from 15,000 to 30,000 sheets per month.

"With these efforts, by July 2007, we will have developed and put in place an integrated production system at five global bases that will be able to take full advantage of the unparalleled production capacity of our Kameyama plant," Sharp said in a statement. "For the 2007 Christmas shopping season, we will be able to provide the timely delivery of LCD TVs that offer superb quality with outstanding cost competitiveness."

Sharp said sales of LCD TVs were $5.17 billion, up 49.4 percent, and unit sales were 6.03 million, 1.5 times the level of the previous year.

The percentage of models sold with screen sizes larger than 40 inches increased dramatically in the latter half of fiscal 2006, in conjunction with the start of operations at the Kameyama No. 2 plant, Sharp said.

With this increase, Sharp's average selling price (the blended price for all sizes) in the latter half of the fiscal year rose by 7 percent compared with the first half of the year, even though retail store prices dropped around 20 percent in the last six months.

"Digital broadcasting is proliferating around the world, and large-size LCD TVs are becoming affordable," Sharp said. "As a result, we anticipate worldwide demand for LCD TVs in fiscal 2007 will grow to 72 million units, 1.5 times the level of fiscal 2006."

Sharp said its goal for global LCD TV sales in fiscal 2007 is to reach approximately $7.2 billion, up 38.5 percent from the previous year, and 9 million units, up 1.5 times.

"Of these, we expect the percentage of models over 30 inches to increase to nearly 80 percent in fiscal 2007 compared with the 55 percent in fiscal 2006," the company said.

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