With more entrants in small-screen production, prices are likely to fall 20 percent in the second half of this year following a 5 percent decline last year, Saji said. Another reason Sharp is reversing its shift to small screens is the outlook for industrywide mobile phone shipments. It expects handset makers to sell between 400 million and 450 million units this year, Saji said. Mobile phone shipments in the year ended last December rose 46 percent to 412.7 million units, according to Dataquest. Sharp, which also makes flash memory chips used in mobile phones, expects the chip prices to fall 10 percent in the first half and 20 percent in the second half of this year.
Flash memory retains data even when the power is turned off.
To withstand the price pressure, Sharp will boost production of chips using the 0.18 micron manufacturing process instead of the 0.25 micron process, Saji said. The smaller the etching on the chip, the greater the data capacity on the same size of chip. Sharp, which hasn't yet sold cellular phones abroad, plans to introduce color-screen handsets equipped with camera functions in the U.S. and Europe this year, Saji said. It plans to boost mobile phone shipments 13 percent to 5.3 million handsets and increase sales 35.6 percent to 183.6 billion yen. The company also plans to almost quadruple its flat-panel TV shipments to 800,000 units this year and triple color LCD monitor sales to 40 billion yen.