Sharp To Cut LCD Output, Workers Abroad

Sharp late last week responded to declining global demand for LCDs, announcing it will close small and midsize LCD panel manufacturing lines at two different plants in Japan in January. According to The Wall Street Journal, the Tokyo-based company also will cut 380 temporary workers—29 percent of its temporary workforce—as it looks for more cost-efficient ways to manufacture LCDs and reduce a current glut of panels. No full-time positions are expected to be eliminated.

The LCD panel lines affected are at plants in Mie and Nari prefectures in central Japan. Sharp Executive Vice President Yoshiaki Ibuchi said in a media briefing in Osaka Friday that Sharp will completely halt all panel production at those lines by September 2009, Reuters reported. Some of the production of small and midsize LCD panels will head to Sharp's flagship Kameyama No. 1 plant in Mie prefecture, where Sharp makes television LCD panels for its popular Aquos brand.

According to a Sharp spokesperson, Sharp will not adjust its shipment forecast for television panels. The company reported in October that it expects to sell 11 million LCD TVs in the fiscal year, according to Reuters.

Several of the world's largest LCD panel manufacturers have been spurred toward similar cost-cutting measures as worldwide demand for LCDs plummets. Last week, LG Display announced that its factories would run at 80 percent of full capacity for the October-December quarter, and that the average selling price of its LCD panels would fall by a percentage in the low 20s for the fourth quarter.

Both LG and Sharp are also expected to plead guilty in a price-fixing scandal this week. According to filings with the U.S. Department of Justice, LG's penalty is $400 million in fines and the company is expected to be sentenced Monday. Sharp has agreed to pay $120 million in fines and will be sentenced Tuesday.

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