Sharp to build 7.5G LCD plant with China's TCL, paper says

Date: 17 January 2007

Japan-based Sharp will build its first 7.5-generation (7.5G) TFT LCD plant by working with China's TCL and the Shenzhen city government, with a memorandum of understanding (MOU) already signed and a stock share percentage breakdown among the parties likely to be 51%, 40% and 9%, respectively, according to the Chinese-language Commercial Times.

The plant, which will have an initial monthly capacity of 30,000 glass substrates, will see equipment installation commence in 2008 and will begin operations later that year, the paper said, adding that the initial investments may stay at around NT$30-50 billion (US$916 million to US$1.5 billion).

Both Sharp and TCL are in urgent need of sufficient supply of large-size panels and both companies have close relationships with Taiwan-based panel makers.

Competing fiercely with Sony in the large-size LCD TV market, Sharp has been reported to be releasing more orders to Taiwan-based panel makers. In June 2006, the Commercial Times said Chi Mei Optoelectronics (CMO) will start shipping 32-inch TV panels to Sharp in July while the monthly shipments of 37-inch panels from AU Optronics (AUO) to Sharp are expected to exceed 100,000 units.

In July of 2006, Li Dongsheng, chairman and president of TCL, was reported by the Commercial Times as planning on visiting Taiwan to seek supplies of LCD panels in the second half of 2006 from Taiwan-based makers such as AUO, CMO and Chunghwa Picture Tubes (CPT).

Sony has a strong support of large-size panel supply by establishing 7G and 8G plants with Samsung Electronics while Sharp has a 6G and a 8G plant for the larger-than-40-inch panel segment.

Recently, Sharp announced it will install a third line at its 8G plant to expand its production capacity for large-size LCD panels, with operation to start by July 2007, which will help boost the monthly capacity at the plant to 90,000 units by 2008.

Sharp estimates worldwide demand for LCD TVs to be 45 million units for fiscal year 2006 (the year ended March 2007) and 68 million units, 1.5 times larger, for fiscal year 2007, while the demand for 40-inch-and-larger LCD TVs is expected to be especially vibrant, the maker said.