January 12, 2005 10:40 AM PST

Sharp invests $1.5 billion in LCD TV boom

Sharp's bet on LCD TVs is getting as big as the screen sizes the company expects consumers will want in coming years.

Sharp announced on Wednesday a $1.46 billion investment in a liquid crystal display manufacturing plant in Kameyama City, Japan. The plant will produce large-screen LCD panels for use in LCD TVs 40 inches and above. Construction of the plant will begin in July, with panel production set to start in October of 2006.

LCD panels are the display component in LCD TVs, which are also made up of color filters, a backlight and other circuitry.

The market for large-screen digital televisions will continue to rise in coming years as digital-television programming increases and consumers purchase bigger screens to take advantage of better picture quality and falling prices. Many screen and television makers, including Sony, Samsung and LG.Philips LCD, have been investing in plants that can produce bigger screens more efficiently--and in larger quantities.

Sharp was one of the first to jump into the LCD TV business. Plant investments can be risky since plants are so expensive to build, and it can take years before profits are realized. Most companies form joint ventures to spread the burden.

Sharp says its new plant will be able to produce eight 40-inch panels or six 50-inch panels per substrate sheet. It plans to use 15,000 substrate sheets per month, which will increase to 30,000 substrate sheets when a second production line is started in 2007.

The company added that it will rely on new methods and equipment to improve plant production processes. Sharp has another, smaller plant in Kameyama City.

LCD TVs tend to have better screen quality than plasma TVs but are generally more expensive in the 40-inch and bigger sizes. That's expected to change as manufacturers ramp up production of LCD TVs that are 40 inches and larger.

 

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