Sharp to cut LCD panel production: report

BANGALORE (Reuters) - Sharp Corp 6753.T will reduce LCD panel production for up to two months starting this month, adjusting supplies as TV inventories pile up in the United States and China, the Nikkei business daily reported.

The company will lower the capacity utilization rate by 20 to 30 percent at its new Sakai factory, which makes panels of 40 inches and up, and cut panel supplies to TV makers including Sony Corp 6758.T, the business daily said.

However, production of panels for Sharp’s own TVs will not be affected and it will maintain capacity utilization rates at its Kameyama plant in Mie Prefecture that makes small and mid-size TV panels, the daily said.

A Sharp spokesman said the company would not comment whether it was considering such a plan.

LCD panels were in short supply in the first half of this year but TVs have started piling up in U.S. and Chinese warehouses as Chinese manufacturers’ production outpaced demand, the paper said.

LG Display 034220.KS Chief Executive Kwon Young-soo said last month the company may cut production of LCDs due to weak demand from TV makers.

Sharp reaffirmed its TV sales target of 15 million units for the business year to March 2011, a rise of 47 percent from the previous year, the Nikkei said.

Sharp expects group operating profit to more than double to 120 billion yen ($1.41 billion), but a decline in panel sales to other manufacturers will likely erode this figure by 10 billion to 20 billion yen, the daily reported.

Shares of Sharp edged down 2.2 percent to 858 yen in early trading on Friday, underperforming the Nikkei stock average .N225, which shed 1.4 percent.

Reporting by Swati Chitnis in Bangalore and Yumiko Nishitani in Tokyo; Editing by Edmund Klamann