NEC to Make Small Screens for Cell Phones, Handheld Organizers
--From AOl. Small, sharp color screens are an essential piece of the wireless web, IMHO.-- Cooters
Tokyo, Sept. 20 (Bloomberg) -- NEC Corp., a major liquid crystal display maker, said it will begin making small, flat-panel color screens used in mobile phones and palm-sized electronic organizers to make up for falling prices of large screens for personal computers.
The company will invest 3 billion yen ($28 million) to make reflecting thin-film-transistor LCDs that don't need backlighting at a plant in Akita prefecture, in northern Japan, from early 2001.
Shifting some production from PC monitors to smaller screens is one way for NEC to boost profitability when prices of large screens used for PCs are falling. Sharp Corp., Japan's largest LCD maker, forecast a decline of as much as 30 percent in prices of panels measuring 13 inches or more in the year to March 31, while predicting only a 5 percent drop for smaller panels.
``We want to have various pillars of profit outside the screen business for personal computers,'' said Shinichi Kaede, an NEC spokesman, in an interview. ``We'd like to avoid a situation where we'll be affected by LCD market prices.''
NEC will revamp part of its A-1 production line in Akita to produce reflecting TFT LCDs, using 10,000 glass sheets measuring 37 centimeters by 47 centimeters, for handheld devices every month. The whole line will maintain production capacity of about 27,500 glass sheets monthly.
Main Target
``Our main target is mobile phones and portable organizers,'' said NEC's Kaede about the production plan. The company, which has been producing color TFT panels measuring 5.5 inches and more, could make two-inch panels for mobile phones if customers demand, he said.
From December the company will also ship small TFT color LCDs with higher resolution than previous models, for use in portable devices including handheld PCs, color photo viewers and electronic books.
NEC will make the 6.3-inch panels, which need backlighting, at a plant in Kagoshima prefecture on the southern Kyushu Island. With resolution of 202 pixels -- individual data points in a graphic image -- per inch, one screen will cost 100,000 yen in sample shipments in December, and NEC will begin regular monthly production of 10,000 units from January.
One analyst said that while NEC's decision to boost small- screen output is an understandable choice given falling prices in large screens, the company should have taken the strategy a few years ago to better fight against ongoing price declines caused by increased production by South Korean and Taiwanese makers.
``As far as timing goes, NEC is a bit late,'' said Hiroyuki Yoshida, a senior analyst at Wit Capital Japan Inc., who forecast a decline of about 30 percent in prices of large panels this calendar year and a 20 percent drop next year. ``It could have avoided the current price risk.''
Another concern for NEC as a newcomer in the mobile phone screen business is whether the handset market will keep expanding in coming years at the pace it's been growing, said Yoshida.
Worldwide sales of mobile phones rose 65 percent to 283 million units in 1999, according to Dataquest Inc., a unit of Gartner Group Inc., a research company. The growth rate for this year is forecast at 45 percent, with shipments rising to 410 million units.
In the year to March 31, NEC expects to ship LCD panels worth 175 billion yen, most of which are large screens. Of the total, some 40 percent will be used for monitors, mostly 14 inches or larger, and 40 percent for notebook computers, according to Kaede.
NEC shares rose 10 yen, or 0.4 percent, to 2,755 yen.
Sep/19/2000 22:09 ET |
