Japan: flat TV manufacturers invest in capacity

Two of Japan“s largest manufacturers of flat screen televisions are raising investments for capacity in order to keep pace with intensifying competition in the global market for digital home applianc…

Two of Japan“s largest manufacturers of flat screen televisions are raising investments for capacity in order to keep pace with intensifying competition in the global market for digital home appliances. Sharp Corp., the leading producer of LCD TVs, said 11 January 2006 that it will invest an extra JPY 200 billion to build a plant for TV-use LCD panels, bringing total investment to JPY 350 billion. It will quadruple capacity from the current level, aiming for a 30% worldwide market share. The additional investment will go to Sharp“s second plant at its Kameyama, Mie Prefecture, production site. The new plant is scheduled to start operation in October 2006. With two plants running side-by-side, the site will have a total capacity equivalent to 22 million 32-inch TV sets in 2008. Sharp had initially set aside JPY 150 billion for production at the new plant using 30,000 glass substrates a month by 2007. The addition of JPY 200 billion will help it raise monthly capacity to 90,000 substrates. “LCD panels are in short supply globally, and we can respond to the growing demand down the road,” President Katsuhiko Machida said. Matsushita Electric Industrial Co., the top plasma TV manufacturer, said 10 January 2006 that it will build a JPY 180 billion facility in Amagasaki, Hyogo Prefecture, to produce plasma panels. Matsushita Electric expects the plant to operate at full capacity in fiscal 2008, more than doubling Matsushita“s capacity to 11.1 million units a year. Parts suppliers are also responding with new initiatives. Toppan Printing Co. is building a JPY 50 billion plant for color filters in Mie Prefecture to coincide with the launch of Sharp“s new Kameyama facility, while Dai Nippon Printing Co. is setting up additional production lines at its Kitakyushu plant in Fukuoka Prefecture. To serve Sharp, Sumitomo Chemical Co. will expand lines for polarizing films at its Niihama, Ehime Prefecture, plant by October 2006 for about JPY 10 billion. Corning Inc., the world“s leading glass substrate producer, and closest rival Asahi Glass Co. will both increase production. The investment boom is expected to continue as the transition from CRT TVs to flat-panel models will accelerate, with the soccer World Cup in 2006 and the end of analog broadcasts in 2011 boosting demand.