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Sharp Suspends Output at Two LCD Plants Following Quake; to Restart in May

Sharp Corp., Japan’s largest maker of liquid-crystal displays, plans to suspend its two biggest LCD factories until May after last month’s natural disaster led to a shortage of materials.

The plants in Osaka and Mie prefectures, halted this month because of a shortage of gas needed for production, will resume operations as early as May 6, Miyuki Nakayama, a Tokyo-based spokeswoman, said by phone today. She declined to say when the company suspended the factories.

Sharp fell in Tokyo trading on concern the halt will erode earnings. The Osaka-based company may lose 50 billion yen ($590 million) in revenue and 15 billion yen in operating profit this fiscal year because of the suspension, according to estimates by Yoshiharu Izumi, an analyst at JPMorgan Chase & Co. (JPM) in Tokyo.

Sharp is prioritizing the use of scarce materials, including gas, at plants that make smaller-sized LCDs because they are experiencing stronger demand, Nakayama said. The company has enough TVs in stock to last about a month, she said. Nakayama declined to specify the amount of TV panels Sharp has in inventory.

The company had started reducing production of TV panels at the two plants, Nakayama said last week. Sharp’s so-called 10th- generation factory in Sakai, Osaka, has a production capacity of 72,000 panels a month, while the eighth-generation LCD plant in Kameyama, Mie, is capable of making 100,000 panels, she said.

Sharp fell 1.2 percent to 768 yen as of the 11 a.m. break in Tokyo trading. Japan’s benchmark Nikkei 225 Stock Average slid 0.3 percent.

To contact the reporter on this story: Mariko Yasu in Tokyo at myasu@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net

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