(Reuters) - Sharp Corp will halve its LCD panel output at its Sakai facility in Osaka in Japan, marking its second deep production cut in a year, hurt by slumping television demand, the Nikkei business daily said.
The reduced rate of production, which will continue for a month or more, is likely to hurt Sharp’s earnings and the company is expected to report a group net loss for the fiscal year ending March 31, its first in three years, the newspaper reported.
Panasonic Corp will consolidate five plants into two locations while Sony Corp is set to close a joint venture with Samsung electronics, underlining the difficult conditions in the TV panel industry, the Nikkei said.
The Sakai plant, capable of making the equivalent of 1.3 million panels for 40-inch TVs a month, was idled for about a month from April. After that, it has run at 80-90 percent of capacity, but inventories have piled up due to weak TV sales during the year-end holidays, the Japanese daily said.
Operations at the Sharp site will be normalised depending on market conditions and it is likely that production adjustments could drag on for a long time, the Nikkei said.
Sharp is contemplating using the lull in production as an opportunity to reconfigure the Osaka factory to make panels with better features like higher resolutions and power-saving functions, the newspaper said.
Reporting by Sunayan Bhattacharjee in Bangalore; Editing by Viraj Nair