Abstract

8G Panel Production Line Critical for Future Competitiveness

The first quarter of 2006 saw both Samsung and LPL ramping up production at next-generation LCD panel plants - 7G and 7.5G plants respectively - , facilitating the development of new 40-inch and 42-inch LCD TV models by the leading international vendors. The competition in the European and US markets between Sony and Samsung ?which are focusing on 40-inch models ?and LG and Philips ?which have both developed 42-inch models ?is growing increasingly intense. Sharp can only offer a 37-inch Full HD (1920?/SPAN>1080) LCD TV to compete with these new 40-inch and 42-inch products.

Sharp will need to get its 8G panel plant at Kameyama online as rapidly as possible, in order to provide the company with 40-inch and larger LCD TV panel production and maintain its dominance in the North American market. At the same time, Sharp needs to work more closely with distributors on marketing and promotion to strengthen its image as the world's leading LCD TV brand in order to provide consumers with high-quality and low-cost LCD TVs, thereby increasing its market share in the global LCD TV market as a whole.

Adjusting Panel, LCD TV In-House Production Shares

Examination of the leading LCD TV vendors' shipment performance in the first quarter of 2006 shows that, whether in terms of shipment volume or shipment value, Sharp had been knocked out of the number one spot. With rival brands continuing to undercut it on price, Sharp will be forced to adjust its production strategy. It will need to purchase more panels from external suppliers, and to outsource a larger share of the production of 32-inch and smaller LCD TVs; eventually, Sharp may even begin to outsource production of 32-inch and larger models so as to ensure that it has sufficient production capacity. By adopting this strategy, Sharp may be able to recover its dominant position within the global LCD TV market.

Appendix

List of Companies