Sharp's Profits on LCD Panels: Worse Than Flat

Japan’s No. 1 maker of LCD screens warns its operations could halt
Illustration by 731

Kameyama, a town of 50,000 people in central Japan, boomed when Sharp started making liquid-crystal-display panels there in 2004. Sharp, which dominated the industry with a 22 percent market share in LCD TVs, poured $6.6 billion into Kameyama, building two state-of-the-art factories and creating 3,000 jobs. Then Samsung Electronics began driving down prices—for 40-inch LCD panels, they fell from about $2,700 at the beginning of 2004 to $250 early this year. Samsung’s market share soared, to 29 percent in 2012 from 10 percent in 2004, and Sharp saw its share plunge to 5 percent. It slashed jobs at Kameyama and in October pledged the factories as collateral along with most of its other properties, including its headquarters in Osaka, to get 360 billion yen ($4.6 billion) in loans to stay afloat.

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