Outline of Main Products and Devices
1) LCD TVs and LCDs
|In the first half of fiscal 2010, sales of LCD TVs were 365.4 billion yen, up 19.4% from the same period last year. On a unit basis, sales were 6.28 million sets, up 43.0%.
In Japan, sales were strong, reflecting increased demand associated with the Eco-Point Program, the Japanese government’s subsidy program that awards “eco-points” for the purchase of environmentally-friendly consumer electronics, and the full-fledged market introduction of the AQUOS Quattron and AQUOS Quattron 3D TVs last July. Overseas, weakened market conditions in the North America led to a decline in sales from the same period last year. Meanwhile, sales increased in other regions, primarily in the Chinese market.
In the second half of this fiscal year, Sharp will strengthen its lineup of uniquely featured, one-of-a-kind products centered around AQUOS Quattron TVs. In particular, we will respond to a surge in demand expected in conjunction with the end of the Eco-Point Program in Japan. We will also work to increase sales by creating new markets, based on extending sales of large-screen TVs 60 inches and larger, on a global basis.
For fiscal 2010 as a whole, we are projecting sales of LCD TVs of 840.0 billion yen, up 26.0%, and unit sales of 15.00 million sets, up 47.2%, compared to the previous fiscal year.
For large-size LCDs, the supply/demand balance in the first half of 2010 tightened reflecting a bullish sales projection by TV manufacturers. However, factors such as turbulence in European financial markets, weak sales of local brand TVs in the Chinese market, and stagnation in the U.S. market led to a rise in inventory in sales channels and a drop in panel prices. As a result, Sharp adjusted production at its LCD panel plant in GREEN FRONT SAKAI during the second quarter. Going forward, Sharp will strengthen efforts to cut costs by standardizing and sharing common designs and components across products, and by promoting procurement that takes full advantage of the appreciation of the yen. In addition, we will work to expand business and improve profitability by creating new markets for LCDs such as TVs and multi-screen display systems with screens 60 inches and larger, where the advantages of the LCD panel plant in GREEN FRONT SAKAI, the only one in the world to utilize 10th generation glass substrates, can be clearly demonstrated.
For small- and medium-size LCDs, the severe market environment continued in the first quarter. However, the situation showed signs of a turnaround in the second quarter, centered mainly on in-vehicle applications and smartphones. In particular, in the areas of high-definition LCDs and 3D LCDs where Sharp’s strengths can be utilized to the fullest, a rise in future demand is anticipated for game devices, tablet terminals, and smartphones. Sharp will work to improve profitability by building a production framework optimized to respond to the needs of the market, and by shifting our focus to growth fields where Sharp’s strengths offer a clear advantage.
For fiscal 2010 as a whole, we are projecting sales of LCDs of 1,090.0 billion yen, up 24.2% from the previous year.
2) Mobile Phones and Tablet Terminals
|Sales of mobile phones were 214.9 billion yen, down 5.1% over the same period last year. On a unit basis, sales were 5.31 million units, up 3.6%. For fiscal 2010 as a whole, we are projecting sales of 450.0 billion yen, down 1.0%, and on a unit basis, sales of 11.00 million units, up 4.3%, over the previous year.
In Japan, major changes in the structure of the industry have taken place. For example, demand for existing mobile handsets declined in the midst of a maturing market, while demand for smartphones grew. Also, there have been vigorous moves by Japanese manufacturers toward business restructuring. Seizing upon these changes as an opportunity, Sharp will push ahead with the development and commercialization of smartphones and tablet terminals in Japan and overseas, with the aim of offering a clear distinction from competitors. This is to be achieved by equipping them with Sharp’s unique, one-of-a-kind technologies, including a superb user interface and 3D devices, while also adopting an open source OS.
In addition, GALAPAGOS, Sharp’s cloud-based media service business, is based on a completely different business model than before and provides a new experience to users. Sharp plans to establish a joint venture company with Culture Convenience Club Co., Ltd., and as a first step, this new company will launch an e-bookstore service in December, 2010. Preparations are underway to provide expanded service offerings such as entertainment content including movies and music around the spring of 2011.
Sharp’s goal is to revamp its business structure by bringing innovative change to a business model not based on selling stand-alone products, but on providing solutions.
3) Solar Cells
|Sales of solar cells were 129.9 billion yen, up 50.7% over the same period last year and production volume was 579 MW, up 77.3%.|
Demand showed a steady increase reflecting the introduction of feed-in tariffs for solar-generated electricity as well as government subsidy programs for the installation of photovoltaic power generation systems in countries around the world. This had a strong positive effect on our sales. In our solar cell business, we are promoting innovation in our business model by implementing local production for local consumption and by expanding the value chain. Through these efforts, we will respond to a growing market and more intense competition on the global level that is expected in the future, as well as cope with exchange rate fluctuations.
Production capacity for crystalline solar modules at our production base in the U.K. will be increased from the current level of 250 MW per year to 500 MW by February 2011. In Thailand, we signed an agreement to establish one of the world’s largest solar power generation plants, and to supply thin-film solar cells and surrounding systems for the plant. Meanwhile, in Italy, we established joint venture companies in July 2010 with Enel Green Power and STMicroelectronics for production of thin-film solar cells, and with Enel Green Power in the independent power producer business. In addition, in September 2010, we signed an agreement to acquire Recurrent Energy, LLC, a leading solar project developer in the U.S., making Recurrent a wholly-owned subsidiary of Sharp. The acquisition is expected to be completed by the end of 2010. Sharp is forming alliances with powerful partners in major markets in all regions around the world, while at the same time expanding the fields in which we do business, with the goal of being a total solutions company in the photovoltaic field.
For fiscal 2010 as a whole, we are projecting sales of solar cells of 280.0 billion yen, up 34.1%, and on a production volume basis, 1,300 MW, up 64.2%, over the previous year.