For quite a while Sharp has been very clear about its intentions to build a Gen 10 LCD fab. In Tokyo on Tuesday, those intentions became a public announcement of specific plans.

The company said it would spend ¥380B ($3.2B) to build a factory in Sakai City, Osaka Prefecture. Sharp may use as much as 120 hectares of land for its plant, four times that for its Gen 8 Kameyama plant in Mie Prefecture.

Ken Werner
Senior Analyst and Editor

The factory will be part of an industrial park that will also include a Dai Nippon Printing color filter plant and factories constructed by rival glass makers Corning and Asahi Glass. Sharp will also encourage manufacturers of chemicals, gasses, and other materials and components used in display manufacturing to locate in the park. The company is also planning to locate a TV-set manufacturing facility on the site, as well as a large solar-cell plant capable of producing enough cells each year to generate 1,000 MW. Sharp is the world’s leading maker of solar cells, Nikkei reports. All in all, over ¥1 trillion yen will be invested in the site.

Plant construction will begin this November, and Sharp intends for production to begin in 2009 or early 2010 (reports vary). Initially output capacity will by 36,000 substrates a month, rising to 72,000. Sharp’s Gen 10 substrate will be 2,850 x 3,050mm, which offers 60% more area than its Gen 8 substrate, which measures 2160 x 2460mm. The major products will be TV panels in the 50 to 65-inch range.

Interestingly, Sharp’s major competitors have been notably cautious about following it into Gen 10 waters. Samsung has said it it’s considering Gen 9, but without any publicly announced timetable. The problem is more complicated than simply trying to keep overall production capacity in line with demand. There is probably little advantage to making 40-inch class displays on a Gen 10 fab rather than Gen 8.

Why? Because the manufacturing cost per square inch starts to level off at Gen 8 so a Gen 10 fab has about the same area cost. This is a change in the dynamics of the LCD industry where subsequent generation plants improved the area cost of production. Therefore, Gen 10 makes the most sense for the purpose Sharp announced: making 50- and 60-inch class panels.

So, what is the likely global demand for LCD-TVs in these size categories? In other words, how many Gen 10 plants can the world support? Sharp is hoping the answer is at least one.

Other manufacturers point to the fact that the U.S. is the prime market for big flat-screen TVs, and that the market in the U.S. and Europe is maturing, with sales growth likely to drop to 10% or so starting next year. The next really big growth markets will be China and India, where smaller screens - 42 inches max - are likely to lead the charge.

Global display economics aside, if your heart is set on a 65-inch LCD-TV, it will be cheaper in 2010 thanks to Sharp.

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