ion yen (US$1.66 billion) to triple output of the panels as rivals raise investment and pare unit costs. Monthly production at the company's Kameyama factory in central Japan will surge to 90,000 glass substrates in 2008, the Osaka-based company said in a release Friday. Output will double to 60,000 by July this year, and the company expects LCD TV sales to jump 50 percent next fiscal year to 9 million units.
"In the current market environment, the investment is necessary," said Mitsuhiro Osawa, a Tokyo-based analyst at Mizuho Investors Securities Co. who rates the company "neutral plus." Declines in LCD TV prices are "a worry," he said.
President Katsuhiko Machida is speeding up production of larger, high-definition screens to outpace falling prices and keep up with rivals such as Sony Corp. and Matsushita Electric Industrial Co. in the US$86 billion global flat-panel display market. Matsushita has said it will expand flat-screen production at the world's largest factory for plasma panels, a rival technology.
"This past holiday season showed an unmistakable shift toward larger TVs," Machida told reporters Friday in Tokyo. "The question is whether the trend will continue."
Sharp Friday said it expects sales to jump 10 percent to 3.3 trillion yen in the year starting April from the 3 trillion yen it expects this fiscal year. Revenue from LCD panels will probably jump 17 percent to 1.2 trillion yen, from the estimated 1.03 trillion yen this year.
The company is building a third production line at the Kameyama factory it opened in August, becoming the first to operate an eighth-generation line. Capital spending will rise 9 percent to about 300 billion yen in the year starting April. Investment in LCD production will remain almost flat at 200 billion yen and the company will spend 10 billion yen on solar panel output, it said Friday.
"We will decide by summer whether to build a new factory and what size of glass to use," Machida said Friday. The company's second and third Kameyama lines are eighth-generation, or 8G, facilities, which use the industry's largest glass.
