Worldwide demand for LCD TVs is increasing at a greater-than-expected pace in fiscal 2006, and we expect that demand will reach 42.00 million units, 1.8 times the level of fiscal 2005. In particular, demand for large-screen and high-resolution models is increasing steadily as countries throughout the world continue to shift to digital TV broadcasts. Taking the lead in the industry, Sharp has worked to strengthen its lineup of full high-definition TVs, which are capable of delivering twice the detail of standard high-definition models. Sales have been better than expected despite higher selling prices. In this light, we see that the trend toward full high-definition LCD TVs will accelerate even more in fiscal 2006.
Currently, there are only a limited number of manufacturers capable of mass-producing full-spec high-definition LCD panels, including 37-inch units. In fiscal 2006, Sharp intends to launch a full-scale deployment of full high-definition LCD TVs globally.
We estimate that the percentage of our unit sales for models 30 inches and larger will increase from 38% in fiscal 2005 to 60% in fiscal 2006. In particular, we forecast that the percentage of models 37 inches and larger will grow from 14% in fiscal 2005 to 26% in fiscal 2006. We intend to focus on full high-definition models for these sizes.

Furthermore, to coincide with this year's Christmas selling season, Sharp is planning a worldwide simultaneous introduction of AQUOS models equipped with LCD panels manufactured at the Kameyama No. 2 Plant. This is the world's first LCD production facility to adopt the eighth generation glass substrates, which enable the production of 40- and 50-inch-class LCD panels with extremely high efficiency. In addition, we are introducing innovative production processes and new materials, such as using an ink-jet production method to form LCD color filters, in order to achieve strong cost competitiveness.
To cope with the growing LCD TV market in Europe, Sharp is constructing a new LCD module plant in Poland, which is scheduled to begin operations in January 2007. This reflects Sharp's decision to commit to start-to-finish LCD TV production in Europe, covering the back-end processes of LCD panels and the final assembly of the LCD TVs. Sharp is already engaged in such start-to-finish manufacture of LCD TVs in Japan, China and Malaysia. Production of the LCD panel itself (front-end processes), the heart of the LCD TV, will remain in Japan. However, establishing a worldwide production system at five global bases for the back-end processes of LCD panels and final TV assembly will make it possible to shorten lead times and to manufacture LCD TVs at lower costs. By constructing such a high-efficiency value chain, along with thorough cost reduction at the Kameyama No. 2 Plant, we will globally introduce LCD TVs that feature unparalleled performance at highly competitive prices.
To coincide with debuting models equipped with LCD panels produced at the Kameyama No. 2 Plant, Sharp plans to deploy a powerful branding campaign for the AQUOS, which we expect will further strengthen the AQUOS brand.

Total sales of LCD TVs for fiscal 2005 were 410.7 billion yen, an increase of 33.0% compared to the previous year. Unit sales were 4.00 million, up 47% over the previous year.
For fiscal 2006, we have set a sales target of 550.0 billion yen, up 33.9% over the previous year, and unit sales of 6.00 million, 1.5 times the level of fiscal 2005.

Total sales for LCDs (panel business) in fiscal 2005 were 857.5 billion yen, up 19.1% over the previous year.
In fiscal 2006, we are forecasting continued strong demand for large-size LCD panels for TVs. For small- and medium-size LCDs, we have increased production capacity of System LCDs in April 2006, and are forecasting continued steady performance, mainly for mobile phone LCDs.
For fiscal 2006, we are projecting sales of 980.0 billion yen, up 14.3% over the previous year.

Demand for solar cells is growing around the world, reflecting increased environmental awareness and the impact of high crude oil prices. In this light, Sharp boosted the annual production capacity for solar cells at the Katsuragi Plant to 500 MW in November 2005. To cope with increased demand in Europe, in February 2006, we also boosted the capacity for module production at our facility in the United Kingdom to 110 MW, just over double the previous levels. For fiscal 2006, we are considering a further increase in our production capacity, which is currently the largest in the world. At the same time, we continue to take steps to deal with a global shortage of silicon, which includes shifting to cell designs with thinner profiles and expanding production of thin-film solar cells. Regarding thin-film solar cells, it should be noted that, in addition to their outstanding feature of using 1/100th the amount of silicon compared to crystalline types, demand for their use as building materials is also growing, as they can be embedded with LEDs or be used as transparent "see-through" modules. Recently, Suzuka City in Mie Prefecture has selected them for use in new government buildings. Sharp intends to work aggressively to expand business in this area.
Sales of solar cells for fiscal 2006 are projected at 200.0 billion yen in contrast to the 158.0 billion yen for fiscal 2005, an increase of 26.6%.

In Japan, "One Segment broadcasting" or "One Seg," a new type of digital terrestrial broadcasting began in April of 2006, and Mobile Number Portability is also scheduled to start in November of this year. Sharp sees such new services as great business opportunities, and is aiming for further business expansion.
According to an announcement made by Vodafone, Sharp's first One Seg-compatible mobile phone is scheduled for release, targeting the timeframe of the 2006 FIFA World Cup soccer tournament in June. Sharp is one of the few manufacturers to have not only mobile network technologies, but also LCD and video technologies, which were nurtured during the development of the AQUOS LCD TV. We think these technologies will enable us to increasingly demonstrate our competitive strengths.
In addition to currently supplying mobile phones to Vodafone and NTT DoCoMo, Sharp will start supplying units to KDDI beginning in 2006. Given that the start of Mobile Number Portability will give users greater incentive to upgrade their mobile phones, Sharp intends to make timely launch of uniquely featured mobile phones that take full advantage of our proprietary device technologies in order to capture new users of Sharp products.

Overseas, Sharp is committed to further strengthening its expansion in the European market, where the widespread adoption of 3G continues at full speed, and to growing the scale of its business in Asian markets.
Sales for fiscal 2005 were 445.1 billion yen, up 10.7% over the previous year, with unit sales of 11.82 million sets, an increase of 18%.
For fiscal 2006, we are projecting sales of 470.0 billion yen, up 5.6% over the previous year. On a unit volume basis, we project sales of 13.00 million sets, an increase of 10%.