Sharp: Chisan Chishou

Localization “Chisan chishou” means local production for local consumption. Make stuff near the customers. This is the concept that Sharp will be implementing in four regions: China, Southeast Asia, Europe and North America. Mikio Katayama, Sharp’s president, announced on April 8, that the company will forge joint ventures in these regions to construct LCD fabrication plants.

Production Technology “Our core technology isn’t making LCD panels and it isn’t making LCD TVs; it’s production technology,” stated Katayama. Sharp will engage a local partner company and share the cost of building a new LCD fab. The LCD panels will then be sold to the partner including royalties for its intellectual properties. Profits will come sooner because the large cost of building a LCD fab will be significantly reduced. Materials and parts required for LCD manufacture will increasingly be procured locally.

Bold & Smart This is a bold and unique move in the LCD industry. I think it is a smart move by Sharp. Local production for local consumption will allow Sharp to minimize currency fluctuations, import taxes, and distribution costs. Because these LCD factories will be closer to the markets they are serving, Sharp will be able to respond much quicker to what customers want and overall demand fluctuations.

Source: Yahoo! UK & Ireland

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