Sharp Sakai: halving LCD production
Plan to concentrate on large-screen TVs for the USA not enough to avoid surprise slump in profits in last quarter of 2011

Sharp has become the latest Japanese consumer electronics company to forecast a drop in profitability, and it's ordering a halving of LCD panel production at its state-of-the-art Sakai plant (above).

The company, which made an operating loss of Y24.45bn (£202m) in the last three months of last year, compared to a Y23.03bn (£190) profit for the same period in 2010, is now predicting it will make a record net loss of Y290bn (£2.4bn) for the 2011-12 financial year.

It's blaming factors including a decline in sales of TVs, and also tough competition in its solar cell business: it had been expected Sharp might weather the turbulent TV market better than some rivals, thanks to its concentration on large-screen models for the US market, but it has now trimmed its sales expectations for the whole year from 13.5m to 12.8m sets.

More after the break

The cuts in output at the Sakai TV panel plant near Osaka, which has a monthly capacity equivalent to 1.3m 40in screens, are planned to last until March, but it's widely expected they could well be extended further into the year.

Company president Mikio Katayama (left) says that "The problems we faced this financial year from lower demand, as the euro debt crisis slowed growth in the global economy, and the strong yen, are expected to make for a bad January-March quarter."

He re-iterated the company's plan to switch most of the production at its Kameyama plant, in the west of Japan, over to small-to-medium-sized screens, of the kind used in smartphones and tablet devices, as a way of increasing the profitability of the company's display division.

Follow whathifi.com on Twitter

Join whathifi.com on Facebook