It’s sometimes good to be reminded that the universe doesn’t center around the US and to some we are simply one more region to offer goods and services that add to the bottom line. The case in point comes this week from LCD-TV giant Sharp that opened the first LCD panel manufacturing plant in North America yesterday-that’s the Mexican state of Baja California and not in the USA or Canada.

Steve Sechrist
Senior Analyst and Editor
Projection Monthly

The Sharp Electrónica Mexico S.A. de C.V. (SEMEX) factory builds giant LCD glass panels, some five feet across, manufactured with the highest degree of intricacy (we’re talking over 2M pixels all individually wired and remarkably, housing a red, green and blue sub-pixel) are manufactured from glass substrates and other components flown in from Japan.

But what is striking about the news is the company will not just assemble components making a finished LCD-TV like its predecessor in Rosarito, Baja California, but actually manufacture completed LCD panels on site.

This production shift accomplishes two things for Sharp. First, it frees up capacity in Kameyama, Japan to focus on the growing ROW demand in markets outside North America. Secondly, it allows the company to take better advantage of its highly developed integrated manufacturing process gaining greater efficiencies that ultimately contribute to Sharp’s bottom line.

The announcement is also telling of just how far the company has come in its integrated manufacturing process. Think of it. For Sharp it is actually more efficient (cost effective) to ship huge glass substrates by air-half way around the world, than manufacture the completed LCD panel on-site at Kameyama, and put the much smaller components on a boat for final assembly in Mexico.

Initial capacity for the new Baja plant is slated at 200K units / year, and at an average of 8-up 50-inch TVs per glass substrate, that’s 25K large glass panels that need to be shipped in air-freight per year or over 2000 per month. That cost can’t be small change, yet remarkably, Sharp can make it back in production efficiencies.

The company obviously did some pencil sharpening around this issue before deciding to plop down the additional $200M to build plant number 2 in Baja, and for the record, did this two years ago-presumably, well before they decided to invest billions more in a Gen 10 manufacturing facility in Japan.

If anything else, Sharp is bullish on LCD technology going forward, and this serves as yet another example of that-and just how far the company has come in perfecting its integrated production capabilities. Hats off to Sharp for leading the way towards the vision of a truly global economy where the highest manufacturing efficiencies can be obtained-even in serving regional markets like us folks out here in the US hinterland.

As more details on this factory and Sharp’s plans come to light, readers of Projection Monthly can expect to see an expanded version of this story in the next issue.

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