Toppan Printing, Dai Nippon Printing To Increase Investments In Sharp's Struggling LCD plant
Sharp has today agreed with Toppan Printing Co., Ltd. and Dai Nippon Printing Co., Ltd. integrate their color filter businesses operated in Sharp's Sakai Plants into Sharp's subsidiary, Sharp Display Products (SDP), in a bid to spin off the LCD production subsidiary.
SDP Sakai Plant, the world's only 10th-generation liquid crystal display (LCD) plant, started operations in October 2009. With the participation of manufacturers of energy infrastructure such as electricity, gas and water in addition to manufacturers of LCD panel components, SDP, Sakai Plant realized integrated production from components to LCD panels, and thereby promoted the vertical integration of LCD panel production.
However, the prolonged strong yen and the low market prices of digital products due to competition, forced SDP to seek for a more efficient management in order to stabilize its operations and reinforce cost competitiveness at Sakai Plant.
Sharp recently executed the Capital and Business Alliance Agreement with the Group of Hon Hai Precision Ind. Co., Ltd.. Under this Agreement, SDP transfers 50% of its production of LCD panel modules to Hon Hai and Sharp respectively, and aims at maintaining the high operation rate and improving the cost performance and profitability of SDP. Sony, which holds a 7 percent stake Sakai, said in March it has no plans to raise its holding, ending an earlier tentative agreement to invest more.
In today's agreement, Sharp, Toppan and DNP have decided to integrate the businesses of liquid crystal color filter, operated by Toppan, Toppan Electronics Products Co., Ltd (TEP), Dai Nippon Printing Co., Ltd. (DNP) and DNP Color Techno Sakai into Sharp Display Products (SDP).
The companies are expected to reach a Definitive Agreement by the end of April, 2012 and start the business integration in June 30, 2012.
With these strategic efforts, Sharp is seeking to promote the further efficiency of large-sized LCD business including the businesses of color filter, the primary component of LCD panel, and become more competitive.
Sharp struggles with a glut in supply of LCDs and weak demand for televisions that has undermined panel prices and left the Sakai plant operating below its break-even capacity. Cutting its stake in the factory would protect the rest of Sharp from the losses.
Sharp also today revised revised its forecast of financial results for the year ended March 31, 2012 announced on February 1, 2012.
The company expects a record net deficit of 380 billion yen , up from Sharp's estimate in February for a loss of 290 billion yen. Sharp has revised its consolidated financial results forecast reflecting shipment delay of LCDs for mobile terminals and costs to reinforce business foundations associated with restructuring in large-size LCD business, which is collaboration with Hon Hai Group and other companies at Sharp Display Products Corporation.
However, the prolonged strong yen and the low market prices of digital products due to competition, forced SDP to seek for a more efficient management in order to stabilize its operations and reinforce cost competitiveness at Sakai Plant.
Sharp recently executed the Capital and Business Alliance Agreement with the Group of Hon Hai Precision Ind. Co., Ltd.. Under this Agreement, SDP transfers 50% of its production of LCD panel modules to Hon Hai and Sharp respectively, and aims at maintaining the high operation rate and improving the cost performance and profitability of SDP. Sony, which holds a 7 percent stake Sakai, said in March it has no plans to raise its holding, ending an earlier tentative agreement to invest more.
In today's agreement, Sharp, Toppan and DNP have decided to integrate the businesses of liquid crystal color filter, operated by Toppan, Toppan Electronics Products Co., Ltd (TEP), Dai Nippon Printing Co., Ltd. (DNP) and DNP Color Techno Sakai into Sharp Display Products (SDP).
The companies are expected to reach a Definitive Agreement by the end of April, 2012 and start the business integration in June 30, 2012.
With these strategic efforts, Sharp is seeking to promote the further efficiency of large-sized LCD business including the businesses of color filter, the primary component of LCD panel, and become more competitive.
Sharp struggles with a glut in supply of LCDs and weak demand for televisions that has undermined panel prices and left the Sakai plant operating below its break-even capacity. Cutting its stake in the factory would protect the rest of Sharp from the losses.
Sharp also today revised revised its forecast of financial results for the year ended March 31, 2012 announced on February 1, 2012.
The company expects a record net deficit of 380 billion yen , up from Sharp's estimate in February for a loss of 290 billion yen. Sharp has revised its consolidated financial results forecast reflecting shipment delay of LCDs for mobile terminals and costs to reinforce business foundations associated with restructuring in large-size LCD business, which is collaboration with Hon Hai Group and other companies at Sharp Display Products Corporation.
