Wednesday, June 19, 2024

Sharp Exits LCD Panel Production, Shifts Focus to AI

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Sharp Corporation has announced its decision to exit the large LCD panel production market, marking a significant shift in its business strategy. This move involves closing its 10th-generation LCD plant in Sakai, Japan, by September 2024. The Sakai factory, which was the world’s first 10th-generation display line when it opened in 2009, has faced financial challenges due to intense competition from Chinese manufacturers, resulting in declining prices and reduced profit margins.

Sharp President and CEO Wu Po-hsuan stated, “This was a difficult decision, but the display landscape is evolving rapidly. We believe the future lies in AI, and we are excited to focus our resources on developing innovative new technologies in this field.”

The company’s exit extends beyond the Sakai plant. Sharp will also reduce the production of smaller display panels at other facilities to streamline operations and allocate more resources to AI ventures. This strategic pivot comes as the market increasingly shifts towards OLED technology, which offers superior picture quality and thinner profiles compared to LCDs.

Sharp’s financial situation highlights the need for this transition. The company posted a net loss of nearly 150 billion yen (about 960 million dollars) for the fiscal year ending in March 2024, marking its second consecutive year of losses.

The future of Sharp-branded TVs remains uncertain. The company may continue to sell TVs using LCD panels manufactured by other companies or could potentially license its brand to other TV manufacturers. This exit from LCD production reflects a broader industry trend, with OLED technology becoming increasingly popular, especially in the high-end TV segment.

Sharp’s decision marks a significant change in the display technology industry. The company has been a major player in the LCD market for decades, and its pioneering work in 10th-generation displays helped shape the industry. However, the rapidly changing technological landscape and competitive pressures have driven Sharp to focus on the growing field of AI. As Sharp embraces AI, its expertise and innovative capabilities will be essential in navigating the exciting new frontiers of this rapidly developing field.

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