Japan electronics emulates Detroit autos before bankruptcy
News On Japan via delawareonline.com -- Oct 17
In 2004, Kameyama, a town of 50,000 people in central Japan, boomed when Sharp started making liquid-crystal-display panels there. Sharp dominated the industry with a 22 percent market share in LCD TVs and poured $6.6 billion into Kameyama, creating two state-of-the-art factories and 3,000 jobs. Farmland was turned into housing as workers in their 20s moved in from as far away as Brazil. Taxes from Sharp paid for the renovation of the train station and a new school with features like a castle.
Sharp, unable to compete, saw its share of the industry plunge to 5 percent. It slashed jobs and workers moved away, leaving the housing complexes in the town deserted. Last month it pledged the factories as collateral along with most of its properties, including company headquarters in Osaka, in return for 360 billion yen ($4.6 billion) in loans to stay afloat.
Then Samsung Electronics began driving down prices, forcing Sharp to keep pace. Prices for 40-inch LCD panels fell from about $2,700 in the beginning of 2004 to $1,300 in 2005 and kept dropping until they reached $250 at the start of this year. Samsung steadily gained market share, moving to 29 percent in 2012 from 10 percent in 2004.
Japan's electronics industry is in crisis. Sharp, Sony and Panasonic had combined losses of more than $20 billion last year and are cutting tens of thousands of jobs. Having the most advanced technology - once a key strength of Japanese manufacturers - matters less as consumers increasingly pay attention to content, apps and user-friendliness rather than hardware specifications. The yen's rise to record levels against the dollar in 2011 added to the companies' misery.
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