Sharp says yield at LCD plant hits crucial 80 percent

Sharp Corp said on Wednesday the "production yield" at its flagship LCD panel plant in western Japan is now around 80 percent, suggesting a steep improvement in profitability since January.
Sharp, the world's largest maker of liquid crystal display (LCD) TVs, began production at the Kameyama plant in January with production yields - the number of panels that can eventually be made into televisions - hovering near 50 percent at the time.
Analysts have said 80 percent is a necessary level of manufacturing efficiency before Sharp can move into the second phase of boosting production at Kameyama, the world's first facility to make LCDs from larger sixth-generation "motherglass".
"We can move into the second phase of the Kameyama plant rollout a month or two early if we want to, but we have no plans to push forward from August at this time," Sharp President Katsuhiko Machida told reporters at an event to mark the factory's launch.
Osaka-based Sharp has said it plans to boost output capacity at Kameyama to 27,000 panels a month in August from the current 15,000. It has already earmarked 100 billion yen ($917 million) for the two-tier plan.
The company expects a third rollout phase at the cost of an additional 50 billion yen in early 2005.
Machida also said Sharp is considering specifications for a new factory, expected to be built next to the Kameyama plant.
Sharp holds nearly 40 percent of the LCD television market, which independent researcher DisplaySearch expects to grow to 35.6 million units in 2007 from around four million in 2003.
Sharp's sixth-generation motherglass measures 1.5 by 1.8 metres, or about the size of three six-foot tall men standing shoulder-to-shoulder. That is big enough for six 37-inch TVs.
Fifth-generation glass plates, such as are used by rival Samsung Electronics Co Ltd, measure 1.25 by 1.1 metres, big enough for two 37-inch televisions. The bigger pieces of glass enable Sharp to lower manufacturing costs.
Shares in Sharp closed down 1.23 percent at 2,000 yen, under-performing the benchmark Nikkei average, which fell 0.07 percent, and seemingly unaffected by the news that production yields had jumped from 50 percent.
J.P. Morgan analyst Hiroshi Takada said there had been rumours in the market that Sharp had reached the 80 percent level, which may have been why the stock did not react.