Sharp plans to close two LCD (liquid crystal display) production lines in Japan as part of a reorganization that's intended to strengthen its position in the competitive flat-panel market.

The company will shift production of small and medium-size panels from factories in Mie and Tenri in central Japan to one of its factories in Kameyama, which is in western Japan. The panels in question are used in products such as cell phones, computers and televisions. Slumping demand for such devices is pushing down the price of LCD panels and putting pressure on profits in the business.

The shift of production from the lines, which are more than 10 years old, to the newer Kameyama factory will help improve efficiency.

Sharp stressed that the reorganization, which is due to begin in early 2009, won't mean major cutbacks in its LCD business.

"We were planning to reorganize anyway but now seemed like a good time," said Miyuki Nakayama, a spokeswoman for Sharp.

Sharp is one of the world's leading manufacturers of LCD panels and uses the panels in both its own "Aquos" brand televisions and sells them to other TV, computer and cell-phone makers. In the six months from April to September the company reported sales of LCD panels rose 16 percent to ¥636 billion (US$6 billion) on the back of expanded production at the Kameyama base.

The IDG News Service is a Network World affiliate.