'Japan's Only' Sharp LCD TV Panel Production Halted... "Due to Chinese Low-Cost Competition"

Japanese Electronics Manufacturer 'Sharp' to Halt Operations in September
Sony and Panasonic Previously Exited LCD Business

Japan, which once led the global LCD panel market, is set to close its last remaining TV LCD factory in the country.

On the 14th, Nihon Keizai Shimbun (Nikkei) reported that Sakai Display Products, a subsidiary of Japanese electronics manufacturer Sharp, will halt operations at its LCD panel factory in Sakai, Osaka, by the end of September. Sharp is the only company producing LCD TV panels in Japan, and with the closure of this factory, the domestic production base for LCD TV panels in Japan will disappear.

[Image source=Getty Images Yonhap News]

The reason behind Sharp’s decision to close the factory is the poor performance of its LCD panel business. Sharp recorded a net loss of 260.8 billion yen (approximately 2.3 trillion KRW) in the 2022 fiscal year (April 2022 to March 2023), and is expected to post a net loss of 10 billion yen (approximately 88 billion KRW) in the 2023 fiscal year (April 2023 to March 2024), continuing to struggle.

Japanese major electronics companies, including Sharp, led the LCD panel sector until the mid-2000s but gradually withdrew after losing price competition to Chinese companies entering the market. Sony sold all its shares in its LCD manufacturing joint venture to Samsung Electronics in 2012, and Panasonic ended TV LCD panel production in 2016. Japan Display Inc. (JDI), established in 2012 by merging the small- and medium-sized LCD businesses of Toshiba, Sony, and Hitachi to revive Japan’s LCD industry, has continued to post losses for 10 consecutive years since its listing in March 2014.

Korean companies have also been hit by China’s low-price offensive. LG Display ended domestic production of low-profitability LCD TV panels at the end of 2022 and is restructuring its business to focus on organic light-emitting diode (OLED) technology. Recently, it has reportedly entered consultations with the Ministry of Trade, Industry and Energy regarding the sale review of its TV LCD panel factory in Guangzhou, China.

Meanwhile, Sharp is aiming to return to profitability by winding down its struggling TV LCD business and expanding its beauty appliance business. This summer, it plans to release a virtual reality (VR) headset display. On the Tokyo Stock Exchange, as of 2:20 p.m. on the same day, Sharp’s stock price was trading at 875 yen, up 2.7% from the previous day’s close.