Sharp Unlikely to Move Production
Jul 15, 2004
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Consumer electronic company Sharp Corp. said it expects stiff price competition from Taiwan and South Korean makers of liquid crystal displays (LCDs) but it has no plans to move production outside of Japan until at least 2010.

"If we took still developing technology overseas now, there is a danger it would become obsolete," Sharp president Katsuhiko Machida told the Foreign Correspondents' Club of Japan.

Key engineering talent remains in Japan and it would not make sense to move production abroad, perhaps to other Asian countries where labour costs are lower, until the technology has matured, Mr. Machida said. "Certainly in the next 6 to 10 years, there will be a major technological revolution. I think from around 2010 a move to production abroad will begin," he said.

Sharp says it foresees a price war as South Korean rivals such as Samsung, LG Philips LCD, and Taiwan's AU Optronics are set to increase output of flat-screen monitors in the coming years.

Mr. Machida said the Osaka-based company will have to cut costs to remain competitive. "There is no (doubt) that we can foresee cost competition. We are already reviewing how to cut costs further at our plant in Kameyama and by doing so we hope to be able to withstand the price competition."

Sharp sold 528.8 billion yen (approx. U.S. $4.8 billion) in LCDs in the last year to March 2004 and targets sales of 730 bln yen in the next year. (Forbes)

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