Sharp Nearly Halts Production of IPad Screens, Reuters Reports

Sharp Corp. (6753) slowed a Japanese production line making screens for Apple Inc. (AAPL) iPads to a minimum level as the U.S. company manages inventory, according to a Reuters report.

The slowdown at Sharp’s Kameyama plant in central Japan started at the end of last year, and output of the 9.7-inch screens is now at the lowest rate needed to keep the line running, Reuters reported, citing two people it didn’t identify who have knowledge of Sharp’s production plans.

Heihachiro Ochiai, a spokesman for Sharp, declined to comment. The Osaka-based company also makes panels for Apple’s iPhone 5. Carolyn Wu, a Beijing-based spokeswoman for Apple, didn’t immediately respond to calls to her office and mobile phones. She didn’t immediately reply to e-mail and text message to her mobile phone.

Reuters reported that it was unclear how much of the slowdown was due to seasonal changes in demand or consumers choosing the smaller iPad mini introduced last year. The Nikkei newswire reported Jan. 14 that orders for iPhone 5 parts had been cut by about half following lower-than-expected sales, underscoring concerns about the smartphone market and sending Apple shares to an 11-month low.

Sharp also is cutting production of iPhone panels to about 40 percent of capacity from close to 100 percent in the previous three months, the Nikkei reported. Sharp gets 3.4 percent of sales from Apple, its biggest customer, according to data compiled by Bloomberg.

The company said last year there was “material doubt” about its ability to survive because of tumbling TV sales.

Sharp is projecting an operating profit of about 13.8 billion yen for the fiscal second half ending March 31, the company said Jan. 7. It had an operating loss of 168.9 billion yen in the six months ended Sept. 30.

To contact the reporters on this story: Gearoid Reidy at greidy1@bloomberg.net; Shunichi Ozasa in Tokyo at sozasa@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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