Sharp targets LCD TV supremacy

When a 108-inch LCD TV turned up at the Consumer Electronics Show (CES) in Las Vegas last January, people stopped to gape at this new technological wonder that literally dwarfed all other products in its class on exhibit.

Awe is exactly the kind of reaction Sharp Corp. wants to generate from the industry and the public by unveiling its first prototype 108-inch LCD TV, the world’s largest, at CES.

The message is as clear: the Japanese manufacturer is asserting its 34-year experience and leadership in liquid crystal display technology, which translated to Y1.03 trillion business for the company last year.

What brings the somewhat docile company and brand to step up its manufacturing and marketing operations is the exploding market for LCD TVs worldwide, fueled by the drastic shift to High Definition (HD) TV format in more countries. It’s a trend that is looking at a global LCD TV demand at high levels of 68 million units this year, from 45 million units in 2006. That and the fact that Korean, Taiwanese and other Japanese companies have entered the LCD market made Sharp, a 95-year-old electronics giant, to once again stir and roar.

Kameyama plant

Last August, Sharp put into operation its second LCD manufacturing plant in Kameyama, Japan which will produce, from start to finish, all 40+-inch and other larger size models of LCD TVs for the global market. The plant will follow a tightly integrated manufacturing business model that will allow Sharp to save on production costs and move products to market faster.

Kameyama Plant No. 2 is a massive 279,100-square-meter factory that stands as proof of Sharp’s solid resolve to preserve its technology and market leadership when it comes to LCD. Sharp executives say that the second plant in itself represents a cluster of industries around the LCD technology, from research and development to component manufacturing. But most importantly it is here where Sharp will utilize for the first time the world’s largest motherglass (8th generation substrate) that measures 2,160 mm x 2,460 mm.

The successful move to 8th generation substrate means that it is now possible to produce LCD TVs in all sizes, from 13 inches to the super large 108-inch model. But for Sharp its use of the 8th generation substrate ahead of other manufacturers also highlights the company’s dominance in LCD technology know-how, said Hiroshi Kusao, division general manager for Sharp’s audio-visual system group.

“Korean and Taiwanese companies are still using 7th or 7.5th generation glass substrates. The 8th generation substrate is 2.7 times more production efficient and suitable for 47-inch or bigger panels. Our technology is at least one year advanced compared to our competitors,” he said.

In July, when Kameyama Plant No. 2’s three production lines are all up, it will be able to produce 60,000 glass substrates (LCD sheets) a month.

“We expect the increase of production capacity in our two plants at Kameyama to 20 million units per year in 32-inch base within 2008,” said Kusao.

By then, Kameyama Plant No. 2’s monthly target will be set at 90,000 glass substrates, an expansion that will require Sharp to invest approximately Y200 billion more.

Aside from LCD technology, the Kameyama Plant No. 2 is also a powerhouse of innovations in the fields of robotics and solar energy. It has the largest installation of photovoltaic power system in the planet, capable of 10,000 KW. Its “super green factory” efforts include the use of innovations to implement the familiar three Rs to being environment-friendly: reduce (greenhouse gas emissions), reuse (plastics in new materials to replace harmful ones such as mercury and lead) and recycle (water and fossil fuel).

Sharp officials were also quick to point out their efforts to produce “super green products.” They said a Sharp LCD TV (with an approximate 60,000 hours of product life) reduces electric power consumption by 30 percent compared to conventional picture-tube based TVs, thanks to its slimmer and lighter profiles.

Meanwhile, the plant expansion for LCD TV production in Japan is part of the company’s strict direction to keep everything in its native country.

“We insist on manufacturing LCD in Japan to avoid risk of leakage and tech know-how. The technology originated here in Japan and the materials and equipment are here… We have 67 partner companies in 76 cities. We use different vendor suppliers so nobody will know what we are assembling and how we’re doing it,” said Toshihiko Hirobe, general manager for Sharp’s AVC LCD group.

Sharp executives proudly say that there is more LCD expertise in Kameyama than anywhere in the world. Calling it the “Crystal Valley” (like Silicon Valley in the US), Kameyama is where “the world’s most advanced LCD experts are working,” added Hirobe.

Sharp focus

In an unprecedented display of openness for a Japanese company to gain mindshare, Sharp officials showed and explained to a group of international press all its latest technologies during a quick tour of the different areas of the Kameyama Plant No. 2.

“Until today, Sharp has not accepted major visitors to its plant,” admitted Takashi Nakagawa, corporate executive director and group manager of Sharp’s International Business Group. “But the growing demand for flat panels made us decide to open a tour of the Kameyama Plant No. 2 to show how our (latest) technologies compare to that of our competitors.”

The newest of them is the 108-inch LCD HD TV manufactured at the Kameyama Plant No. 2. Its market has not been finalized or properly identified yet, but Sharp officials believe its first practical use will be in public places like airports where it can serve as information display.

“By July, we want to make our plans more concrete toward commercialization of the 108-inch LCD TV,” said Nakagawa.

In the meantime, the 108-inch LCD TV represents the television that “Sharp has been dreaming of since 1953,” when Sharp began the development and mass production of TV sets, said Hirobe, who added that it has also been the company’s “dream to deliver beautiful images all over the world in people’s living rooms.”

Key to the realization of that dream is the continuous enhancements in LCD technology in terms of screen measurements and display quality. Sharp, since developing the world’s first electronic calculator with LCD screen in 1973, has been relentless in bringing more “LCD firsts” in the world of consumer electronics.

In 1987, its research labs made possible the development of a 14-inch TFT (thin film transistor) color liquid crystal display. Two years later, the company marketed its 100-inch color LCD projector, followed in 1990 by a series of 8.6-inch wall-mount LCD TVs. The next years brought the world bigger Sharp TFT LCD TVs, leading all the way to the current 108-inch model.

At Kameyama Plant No. 2, Sharp also introduced the use of inkjet multi-primary color filters to achieve highly realistic color display. Sharp officials say this is the first time in the world that such technology is being used for LCD TVs. Inkjet enables dramatic expansion of color by using multi-primary colors instead of just the conventional three primary colors (RGB).

“Highly realistic color display creates next-generation LCD TVs that give more faithful and vivid colors,” explained Hirobe,

Those colors eventually become the color of money for Sharp. For four years in a row, Sharp’s LCD TV and large LCD panel business has served as the engines driving the company’s strong financial results, shared Nakagawa. This year, this thriving product segment is projected to be a Y1.2 trillion business for Sharp which, overall, is eyeing net sales of Y3.3 trillion from Y3 trillion last year.

LCD forecast

Today in Japan, Sharp’s large LCD TV brand, Aquos, is enjoying 50 percent market share and is growing to 75 percent after the company tapped a very famous Japanese actress for its TV commercials. Its LCD business, on the other hand, is being buoyed up by high demands coming from its other product groups and from external customers. Sharp uses its LCD technology for its other consumer electronic products as well as for its line of mobile phones, which commands a top share of the local market. In addition, leading mobile phone companies and game console makers turn to Sharp as OEM (original equipment manufacturer) of their LCD requirements.

Feeding the growing LCD market are consumers mostly from first-world countries who are eager to get their first big LCD TVs even though they pay a premium. Europe (40 percent) and the US (30 percent) are the leading markets for this luxury appliance last year, followed by Japan (14 percent), China (11 percent), and the rest of Asia (five percent).

“We expect demand this year to reach 68 million units worldwide to 88 million in 2008. We also expect Asia to exceed the demand coming from Japan in 2008,” said Kusao.

In 2009, global LCD demand is projected to balloon to 86 percent more from current levels. Kusao said Sharp is preparing to meet this upcoming demand by doing simultaneous global rollouts of its next-generation Full Spec High Definition LCD TVs and large-sized flat panel displays. Now, the only questions left are, how big would those future Sharp LCD TVs be and would they still fit inside your living room?