SHARP Business Strategy
President
Katsuhiko Machida February 16, 2005
1
I.I. Environmental Environmental Preservation Preservation
2
Sharp’s Target: No Global Warming Burden Achieve a balance between business growth and environmental conservation by balancing the volume of emitted greenhouse gas with the volume of decreased greenhouse gas by 2010 CO2 Million ton
Greenhouse gas emissions produced through business activities
Zero global warming burden in year 2010 Greenhouse gas saved by solar cells and energy-saving products
2004
2010
3
Business Growth along with Environmental Technologies
Save Energy
LCD TVs
Create Energy
Solar Cells
Environmentally Advanced Company
4
II. II. Business Business Strategy Strategy
1. LCD TVs / Large-size LCDs
5
1. LCD TVs / Large-size LCDs Diffusion of Terrestrial Digital Broadcasting in Japan Millions of households
47 40
37.0 (79%)
30
27.0 (57%)
20 10
18.0 (38%) Number of households receiving terrestrial digital broadcasting
0 End of 2004
End of 2005
End of 2006 (Source: D-pa)
6
2005 International CES
(2005 international CES)
7
Worldwide LCD TV Demand Thousands of units
33,900
35,000 30,000
23,000
25,000 20,000
14,300
15,000 10,000
7,980
5,000 0 2004
2005
2006
2007 (Source: JEITA)
8
Worldwide Demand for LCD TVs 30V inches and over Thousands of units
14,000 40V inches and over
12,000
2,200
10,000 30-39V inches
8,000
1,100 11,600
6,000
400 7,000
4,000 2,000 0
90 3,600 1,300 2004
2005
2006
2007
(JEITA’s forecast for total demand x Sharp’s forecast for unit sales ratio by size)
9
Kameyama No.2 Plant
Start of operation: Oct. 2006 Amount of investment: 150 billion yen The world’s largest substrate (2,160 x 2,400 mm) * Eight 40-inch class panels or six 50-inch class panels from each substrate Substrate input: 15,000 sheets per month * To increase to 30,000 sheets per month in 2007
10
Expanding Production Capacity at the Kameyama Plant Thousands of units/month
(32-inch equivalent panels)
900
810
585
600
225
Kameyama No.2 Plant
450
Kameyama No.1 Plant
300
360
360
360
Apr. 2005
Oct. 2006
2007
216 0 Aug. 2004
11
Improve Cost Competitiveness at the Kameyama No.2 Plant
Slash material costs
32型
Co-develop materials with material manufacturers from the initial designing stage * Backlight, color filters, polarizers, etc.
Highly efficient plant layout Halve the length of production line and production lead-time (in comparison with the Kameyama No.1 plant)
2. Small- and medium-size LCDs Reasons for Growing Demand 32型
More handsets with color display and enhanced features…
Increased demand for high resolution small- and medium-size LCDs, such as System LCDs
12
13
System LCD Production Capacity (2-inch equivalent panels)
Millions of units/month
19.0
20 18 16 14 12 10 8 6 4
12.2 Mie No.3 Plant
6.5 2.5
2 0
Tenri Plant
Oct. 2002
Jun. 2003
Mar. 2004
Apr. 2005
14
Sharp’s Small- and Medium-Size LCD Competitiveness
32型 Keep LCD technologies and know-hows as “black-box” to prevent them from being leaked
Utilize various LCD related patents
Cultivate new markets for new applications
3. Photovoltaic Power Systems Reasons for Growing Interest for Photovoltaic Power Systems Energy Energyissues issues Electric power shortage in China
Environmental Environmentalissues issues
Increasing CO2 emission
Large-scale blackouts Skyrocketing crude oil prices
Climate change on a global scale
Growing interest in renewable energy
15
Sharp’s Photovoltaic Power Systems in Japan Residential Use
Industrial Use
Municipal Municipal buildings buildings in in Nishi Nishi Harima Harima region region
“Solar “Solar Town” Town” in in Kasukabe Kasukabe city city
Water Water purification purification plant plant in in Mihara Mihara city city
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Sharp’s Photovoltaic Power Systems Overseas 10.1MW: 10.1MW: Bayern, Bayern, Germany Germany
1.7MW: 1.7MW: Bayern, Bayern, Germany Germany
Provided by PowerLight
400kW: 400kW: California, California, U.S.A U.S.A
Provided by PowerLight
350kW: 350kW: Salzburg, Salzburg, Austria Austria
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18
Sharp World’s Largest Solar Cell Production Capacity MW/Year
450
400MW
400 350
315MW
300 250 200
248MW 200MW
150 100 50 0 Feb. 2003
Nov. 2003
Jun. 2004
Jan. 2005
19
Change in Price of PV Power Systems for Residential Use in Japan Yen/kWh
150 Price Price for for residential residential use: use: 23yen/kWh 23yen/kWh
120 90 60 Dotted line: Sharp’s target
30
52 50 48
23
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 (Fiscal year) (Source: Sharp based on METI data)
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Sharp’s Illuminating Solar Panel “Lumiwall”
“See-through” thin-film solar cells
+
Long-life, energy-efficient, high-intensity LEDs
＝ Power generation
Daylight transmission
Illumination function
Three functions combined in one product
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Worldwide Photovoltaic Power System Demand 1,600
MW
1,600 1,400
1,130
1,200 1,000
867
800 600 400 200 0 FY2004
FY2005
FY2006 (Source: Sharp)
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III. III. Mid-term Mid-term Target Target
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Sharp’s Mid-term Net Sales Target
[ Fiscal 2007 ]
3.3 trillion yen
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IV. IV. Capital Capital Investment Investment
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FY2005 Capital Investment Billions of yen
Total 220.0
For large-size LCDs: 64.0
For Small- and medium-size LCDs: 76.0
For LCDs: 140.0 FY2005(Forecast)
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Capital Investment Billions of yen
250
220.0
220.0
220.0
200 150 100
For LCDs
130.0
140.0
50 0 FY2004
FY2005
FY2006
(Forecast)
(Forecast)
(Forecast)
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Notes Regarding Future Plans and Estimates: This report contains statements describing future plans, strategies, and estimated performance. These descriptions are not based on past facts, but on the management’s assumptions and beliefs in light of the information currently available. These plans, strategies, and performance estimates are subject to a certain amount of risk and uncertainty due to such factors as economic changes, supply-demand fluctuations, increased competition, currency exchange rates, and changes in tax laws. Please understand that actual business results may vary from our estimates.
