The venerable Japanese electronics company Sharp has announced that it’s exiting the LCD display business, giving way to Chinese companies that have emerged to dominate that segment of the industry. 

Sharp’s president and chief executive Wu Po-hsuan confirmed the plan this week in an interview with Nikkei Asia, saying that it will soon cease display manufacturing operations at its factory in Sakai, Japan, by the end of September. 

It’s a sad end for the company, which once envisioned itself emerging as a leader in the LCD display making business. Sharp became the first company in the world to open a 10th-generation LCD plant when it inaugurated that factory back in 2009, but unfortunately the facility has been running at a loss for most of its history. 

The company said it’s not just LCD displays for TVs, but also smaller panels used in monitors and other devices that will be discontinued. In addition, it will also shut down production of smaller panels at other facilities it owns, in order to focus on what it termed “AI-related business ventures.” 

The announcement is somewhat surprising as Sharp has been looking to revitalize its TV business, making a comeback in the U.S. market two years ago, launching its first OLED models. But then again, the company doesn’t need to manufacture its own LCD panels, and will likely source them from the Chinese display makers that likely contributed to its decision to shut down the Sakai plant. 

Chinese display makers including TCL CSOT, China Star, HKC and BOE have emerged to dominate the LCD display panel business, with their massive factories spitting out all manner of panels at lower prices, thanks to the lower labor costs in that country and the fact that many components can also be sourced locally. It was an inability to compete with these firms that ultimately prompted Samsung Display to exit the LCD manufacturing business, and LG Display appears to be on the verge of following suit, having already closed all but one of its LCD factories. 

Now with Sharp confirming its plans to exit, China has basically been given a free rein to dominate the LCD production business. Sakai was the last remaining Japanese plant manufacturing LCD displays.  

These days, brands such as Samsung, Panasonic, Sony, Philips, TCL, Hisense and even LG to an extent all source their LCD displays from Chinese producers. However, South Korea has switched its focus to OLED displays, and LG Display and Samsung Display currently dominate that niche. 

Omdia said in a March 2024 report that Chinese factories accounted for 77% of all Gen 7 and larger LCD substrates shipped to TV brands in 2023. It said that if Sharp shuts down its operations, production will be further consolidated within China, amounting to more than 80% of the global LCD panel supply. 

The dominance of Chinese brands is somewhat worrying, as Omdia expressed fears that this will enable its panel suppliers to potentially band together and control pricing. “In this scenario, leading Chinese TV panel suppliers such as BOE, China Star, and HKC will gain even more leverage when negotiating with global TV brands,” its analysts said.

Going forward, Sharp’s display making business will follow the Koreans’ lead, focusing on OLED and experimental technologies such as MicroLED and NanoLED.