Recently, Sharp has been the subject of many news stories and rumors about its LCD business, and the company has tried to take control of the discussion with several announcements. The rapid-fire news emphasizes the challenges the company faces, as well as highlights the technical prowess of the last remaining top tier Japanese LCD maker. Consider the following:

• Multiple stories in the press have suggested Sharp would build a Gen 10 factory in China with the Nanjing Government; Sharp has denied this.
• News reports indicate that Sharp will license proprietary manufacturing technology to Chimei Innolux.
• Rumors indicate that Sharp will build a new Gen 6 LTPS fab with upfront investment made by Apple for iPhone panel production.
• In the beginning of April, Sharp completely shut down both its Gen 8 and far-from-depreciated Gen 10 fabs. Although some reports implied that this was due to component shortages in the wake of the March 11 earthquake, the decision was driven more by demand than supply.
• Sharp and AUO settled a patent dispute on April 15 through a cross-licensing agreement.
• Articles in the Japanese press suggested that Apple has decided not to work with Sharp to build a new fab.
• Sharp rebutted that on the very same day, “The article is one-sided and contradicts the facts, and severely harms the trust of our company.” Sharp’s repudiation of Nikkan’s claim is vague on what the real story is.
• And then on April 21, 2011 a surprise announcement, “Sharp to Commercialize World’s First Small-and Medium-Size LCD Panels using Oxide Semiconductor.”

All leading LCD and AMOLED producers have been working on oxide semiconductor TFTs (typically a-IGZO). IGZO offers the potential of low cost and electron mobilities of 10-30X those of a-Si. Higher electron mobility can be used to reduce device size and increase aperture ratio, enhance electronic device integration on to the glass, increase TFT speed, ultra high definition (UD) displays like 4K × 2K at 240 Hz, and is sufficient to drive AMOLED pixels. It is unclear exactly when Sharp started research on oxide semiconductors for TFT LCD, but in December 2009 Sharp presented a paper at IDW Japan suggesting that it had resolved all major issues inhibiting IGZO FPD mass production.

After months of silence, Sharp’s recent announcement stated that it will begin production on its Gen 8 Kameyama line by the end of 2011. The company implied production will target small and medium LCDs, presumably including tablet displays. This implies the potential for a huge amount of production volume: DisplaySearch calculates that if Sharp uses 25% of Kameyama G8 capacity to make tablet panels, it could produce about 33 million panels per year.

Mass production of oxide semiconductor based FPDs would be a major milestone for the industry. Sharp has made many manufacturing breakthroughs, including the first Gen 6, Gen 8 and Gen 10 fabs and UV²A optical alignment. Now it looks like Sharp may become the world’s first commercial producer of oxide semiconductor-based LCDs.

If Sharp is successful with IGZO, it will be another notch in its technology portfolio. But it is unclear if it offers enough benefit to small/medium displays to gain significant market share, and it is unclear how big the near term market for UD displays is. Oxide semiconductors in themselves may not be big enough to overcome high production costs in Japan, heavy reliance on the Japanese market, and increasing global competition. Unless Sharp can rapidly develop AMOLEDs, which gain the most from IGZO, it may find once again that the best way to capitalize on its technical prowess is to license it to another manufacturer.

Considering the long list of rumors about and announcements by Sharp since the beginning of this year, it is easy to wonder about its motivation for timing the IGZO announcement now. Was the early announcement a calculated effort to publish optimistic news in the face of the Gen 8 and 10 line shut down, the concern that the Gen 6 LTPS fab with Apple could be in danger, and general concerns about Sharp’s long-term FPD strategy?