Sharp 2011 Annual Report Download - page 13

Download and view the complete annual report

Please find page 13 of the 2011 Sharp annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 70

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70

11
Annual Report 2011
Interview with the President
Shifting to High Value-Added and Growth Areas
The diagram “Business Areas Targeted by Sharp” on
page 10 shows added value on the vertical axis and the
LCD panel size on the horizontal axis (“For mobile
devices,” “For PCs, for TVs,” and “For large-size TVs &
non-TVs”). Due to growing commoditization in the LCD
market for PCs as well as for widespread-size 32-to-40-
inch TVs (in the center of the diagram), it is extremely
difficult to secure healthy profits in these areas, with
major LCD panel manufacturers across the board facing
declines in profits.
By contrast, in the areas where cutting-edge elemental
and production technologies are required, Sharp is able
to leverage its one-of-a-kind technologies. These growth
areas include mobile LCDs used in smartphones and
tablet terminals, as well as large-size LCDs for TVs 60
inches and larger, and non-TV applications like digital sig-
nage. We will work hard to strengthen the LCD business
and enhance profitability by concentrating management
resources in growth areas where we have a technolog-
ical edge and top market share.
As for widespread-size LCD panels for TVs, we will
introduce rigorous cost reduction measures, including
the purchase of these panels from alliance partners.
Initiatives for LCD Business Restructuring
Sharp is pursuing two courses of action in the restruc-
turing of the LCD business, to respond swiftly and flexibly
to changing business conditions, with the aim of achiev-
ing business expansion and improved profitability.
The first one calls for strengthening the mobile LCD
business, specifically the optimization of LCD production
framework, achieved through a shift from the production
of LCDs for TVs to LCDs for mobile devices. The second
one involves a shift to growth areas for large-size LCDs,
which means targeting the creation of new markets for
large-size LCD panels that are 60 inches and larger.
For the first course of action—strengthening the
mobile LCD business—we are converting the Kameyama
Plant, which previously specialized in large-size LCD pro-
duction, so that it can also make mobile LCDs for
smartphones and tablet terminals in addition to LCDs for
TVs. Our aim is to meet the huge demand and establish
a production framework that can respond flexibly to
changes in the market.
Regarding the second course of action—the shift to
growth areas for large-size LCDs—we will shift to busi-
ness areas where we can maximize the competitive
edge we have with the Sakai Plant, the world’s only 10th
generation LCD panel plant. Here, we will target mar-
kets for the large-size TVs 60 inches and larger and
non-TVs, including digital signage. At the same time, we
will reduce costs by standardizing and sharing designs
and materials, as well as procuring LCD panels from
alliance partners. Through such efforts, we will strength-
en the foundation of the large-size LCD business and
improve profitability.
Kameyama Plant