Vertical Divider

Sharp’s OLED Pilot Line ProducesSmall/Medium Displays 
August 06, 2018
 
Sharp’s struggles in the mid 2000s led to years of losses but its Gen 10 fab in Sakai attracted the attention of Terry Gou, the chairman of Hon Haiwho took a personal stake in the fab, and after a number of years of negotiations, Hon Hai bought a controlling stake in Sharp itself. Since then, under Hon Hai’s management, Sharp has been re-invented and vastly improved its image and profitability.  But Hon Hai’s management style is far less benevolent than Sharp’s and has little love for inefficient or money losing operations.  As such it will be closing one of their TV assembly plants and their refrigerator assembly plant in Japan, moving production to a Foxconn facility in Thailand.  The refrigerator plant had been in operation since 1959 but had been continually downsized as more of Sharp’s business was done outside of Japan (70% last year and 80% expected this year) and the closing of the TV assembly plant follows Sharp’s path of moving assembly to target selling locations.
 
Sharp’s LCD production, which had been primarily an OEM business as the Sharp brand deteriorated, has now been oriented toward the Sharp brand, and relationships with other TV brands, particularly Samsung Electronicsand Hisense have ended.  Hon Hai recognized the need for Sharp to stay focused on changes in the display business and funded R&D on OLED development after its purchase.  Experience with IGZO backplanes gives Sharp a leg up on producing OLED TVs, but Apple’s use ofOLED smartphone displays made it imperative that develop small panel OLED technology or lose a portion or all of Apple’s iPhone business.  Since 2016 Sharp has been running a Gen 2.5 R&D OLED line and a Gen 4.5 OLED pilot line in the Sakai facility, and announced it will begin mass production of small panel flexible OLED displays by the end of the year. Sharp is expected to produce an OLED smartphone for the first time. Sharp’s plan was to build a Gen 6 OLED fab after proving its OLED expertise with the pilot line.  However, Sharp now sits behind Samsung, LG Display and BOE in its race to become a certified supplier to Apple.  Moreover, the landscape has changed substantially since Sharp initiated its plans. Flexible OLED demand is growing slower than anticipated.  Samsung has deferred expansion plans and the Chinese government is asking OLED makers to slow down expansion. Perhaps, Hon Hai will reexamine the opportunity before it decides to put US$4.3b in a 6thGen flexible OLED fab.