*NEWS*SHARP & CANON FLEX MUSCLES
*NEWS*SHARP & CANON FLEX MUSCLES
2006-01-10 at 10:28:00 am #13803
Sharp & Canon flex muscles with expansion plans
TOKYO – Sharp Corp. and Canon Inc. both unveiled plans on Friday to boost output for their core products, underscoring strong sales and growing confidence at two of Japan’s top technology companies.
Sharp will invest about 15 billion yen ($130 million) to boost production capacity for liquid crystal display panels by 18 percent, while Canon plans to build a 14 billion yen factory in south-western Japan to make lenses for high-end digital cameras.
Sharp, the world’s largest maker of LCD televisions, has been ramping up output of LCD panels at its flagship Kameyama factory in western Japan as consumers trade in bulky cathode ray tube TVs for flat screen models.
Canon, meanwhile, has enjoyed strong demand for digital single lens reflex (SLR) cameras, which are more expensive and offer better performance than simple point-and-shoot compact models, and typically use interchangeable lenses.
Sharp President Katsuhiko Machida said his company’s investment would boost daily capacity to 2,000 sixth-generation glass substrates (6G) by April, or 60,000 per month. Currently, the plant can process about 51,000 substrates each month.
Sharp can cut six 37-inch LCD panels from one 6G substrate.
“Right now we simply cannot keep up with demand,” Machida said at a New Year reception of Japanese electronics executives.
“We will use up all the space we can at the first Kameyama factory but a major issue for us will be the second plant.”
Sharp is building a second plant at Kameyama, aiming to start operations in October 2006. The new factory will cut panels from larger and more efficient eighth-generation glass, able to yield eight 45-inch panels, compared with just three using 6G glass.
“I would like to bring forward the start (of the second plant) but we are introducing new production technology and we have to monitor just how that goes,” Machida said.
Canon said it would build the lens plant on the same site in Oita prefecture where it produces digital SLR cameras, allowing it to cut costs and speed up time to market as it would not have to ship lenses from other factories in Japan and Taiwan.
The world’s largest digital camera maker will aim to bring the factory on line in May 2007, employing about 600 people.
The announcement comes less than six months after Canon unveiled plans for a 80 billion yen ink and toner cartridge factory in Oita and further underlines the growing gap between winners and losers in Japan’s electronics sector.
While Canon and Sharp invest aggressively in the future, electronics makers like Sony Corp., Sanyo Electric Co. and Pioneer Corp. are cutting staff and closing plants in a bid to revive their flagging fortunes.
“Capital investment is our focus right now. This is not the time to be saving (cash),” Sharp’s Machida said.
Citing expectations for strong demand from consumers in the major markets of the United States, Europe and Japan, Machida said he expected the global LCD TV market to nearly double to 36 million units in the business year starting in April.
Machida said he expected Sharp to sell 6 million LCD sets in 2006/07. This means it expects its market share to fall slightly to about 17 percent compared with its target of accounting for one-fifth of a market seen reaching 20 million units in 2005/06.
Sharp said that it would focus on the high-end of the market, aiming to sell larger models and those that meet full high-definition specifications, able to produce images at the highest standard of 1,920 by 1,080 pixels of resolution.
Shares in Sharp closed up 1.24 percent at 1,876 yen while Canon’s stock gained 0.98 percent to 7,210 yen. Both outperformed the Nikkei average, which ended virtually flat.