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Sharp is on the verge of collapse, IGZO technology remains only hope for survival

Japanese multinational technology giant, Sharp Corporation, recently revealed it may collapse if executives couldn’t find a way to turn it into profitability once and for all. The revelation came following the company’s bad third quarter earnings report. It was forced to issue a statement because it is a part of every company’s disclosure requirements to reveal possible concerns about their survival whenever they are having credit trouble.

Unlike other companies that were left with nothing, Sharp still has one last string to pull in order to survive; the IGZO technology for display panels. To be able to bring the company back into a healthier state, it needs to cut costs. It means that hundreds of employees may be sent home without a job in the following weeks or many would complain their salaries were slashed. Moreover, Sharp has to secure enough credits to fund its drive to survival.

It may seem shocking for people who may have several of Sharp appliances at home but it is never a surprise for analysts. The fact is many of Japanese technology companies are into big credit trouble; Panasonic and Sony are among them. Sharp had engaged into a mobile market in the last couple of years but such strategy has never been successful, or at least, it didn’t work out the way the company predicted it to be.

As Sharp has little global presence in the smartphone market, it is relying almost entirely on its domestic sales. However, even when majority of the Japanese prefer domestic electronic brands, international brands like Apple and Samsung are stealing customers away from local brands. Japan’s MM Research Institute revealed that Apple reigns as the biggest smartphone vendor in Japan to have captured 32.1 percent share by shipment from January through September. Fujitsu Ltd comes in second with 16.9 percent followed by Sony with 11.7 percent share, just slightly ahead of Samsung with 10.7 percent.

It was not, however, the smartphone venture that caused so much trouble; it was the company’s overzealous turn to produce LCD panels for large TV screens. As part of the company’s restructuring plan, it will turn its focus on the booming smartphone and tablet market and product small- to medium-sized LCD panels keeping IGZO (named after indium gallium zinc oxide semiconductor) technology aboard. IGZO is believed to be a power-saver but what if other companies, like LG and Japan Display, could develop a display technology better than what Sharp offers?

[source: Computer World]