Sharp to build LCD TV module plant in Poland

Sharp Corp.plans to spend $53.4 million to build a plant in Poland that will make LCD (liquid crystal display) modules, the company said Thursday.

Sharp Corp. plans to spend $53.4 million to build a plant in Poland that will make LCD (liquid crystal display) modules, the company said Thursday.

The plant will take LCD panels produced at a factory in Japan and add components, including backlights and driver chips, to produce a finished LCD module. The modules will then be shipped to plants at Sharp in Spain and Loewe Opta GmbH in Germany to be combined with other parts to produce finished TVs.

Sharp said it’s anticipating “extremely rapid growth” in European demand for flat-panel TVs soon and that the new factory will help it satisfy that demand.

It will be capable of producing 100,000 modules per month when it begins operation next January. Sharp expects this to grow as it investments more money in the plant.

Details of the project were hammered out at a meeting held Thursday in Warsaw between Sharp President Katsuhiko Machida, Prime Minister Kazimierz Marcinkiewicz and Under Secretary of Economy Andrzej Kaczmarek, both of Poland, Sharp said.

Sharp’s investment comes as the company has just finished expanding production at its site in Japan. Sharp raised LCD panel production capacity at its Kameyama plant by 20%, to 60,000 glass substrates per month, beginning from March this year. The expansion cost the company $127 million.

A second LCD plant is also under construction in Kameyama and is expected to be completed by next March.

Behind the investments is fast-increasing demand for LCD flat-panel televisions. Shipments of LCD TVs more than doubled in 2005 to 19.6 million, from 8.9 million in 2004, according to a January report by market research company iSuppli Corp. Over the next four years the market will expand at an annual compound growth rate of 54% to hit 76.7 million units in 2009, the company said.

With such strong growth expected, Sharp isn’t alone in ploughing millions of dollars into ramping up production of LCD panels.

Earlier this week Sony and Samsung Electronics reached a basic agreement to build a new $2 billion LCD manufacturing line in Tangjeong, South Korea. Through their S-LCD Corp. joint venture the two companies began jointly making LCD panels last year and are in the middle of a $97.4 million expansion of the original production line. That’s scheduled to be complete by July this year, and the new factory should be online in the latter part of 2007.

Also, at the beginning of this year both Samsung and rival LG.Philips kicked off production at new plants in South Korea. As production began each company also laid out expansion plans. Samsung said it would double production at its plant by the end of this year, while LG said it would double capacity by the first quarter of 2007.