Financial Material

On a monetary basis, sales of LCD TVs in the third quarter were 199.9 billion yen, up 19.8% from the previous quarter. Sales on a unit basis were 3.04 million sets, up 27.1%. In Japan, the government's introduction of the Eco-Point System contributed to an increase in sales. In particular, the LED AQUOS, which was introduced in November 2009 and features newly developed UV2A photo-alignment technology and an LED backlight, has been highly rated for its superior image quality and low power consumption. Sharp will further boost sales by expanding line-up of these LED-backlit models. Overseas, markets in emerging countries, particularly China, are expected to grow. Sharp will be pursuing the creation of optimum production frameworks to realize local production for local consumption and meet the demands of these markets. In addition, Sharp will be working to expand the business and improve profitability by boosting sales of distinctive products that make the most of Sharp's proprietary technologies. These include LCD TVs that are 60 inches and larger in size and LCD TVs featuring built-in Blu-ray Disc recorders and next-generation LCD panel technologies. For the whole of fiscal 2009, Sharp anticipates sales of LCD TVs on a monetary basis of 680.0 billion yen, down 6.8% compared to the previous year, and on a unit basis, 10.00 million sets, about the same as the previous year. Regarding large-size LCDs, demand for TV panels remains strong. Reflecting such an environment, Sharp's LCD panel plant in Sakai is operating at full capacity with an input of 36,000 substrates per month. Going forward, Sharp expects continued stable operation and improved profitability during the fourth quarter. Under these circumstances, Sharp is creating a unique brand of large-size LCDs through the synergy of 10th generation glass substrates, photo-alignment technology and other Sharp's proprietary technologies. Moreover, Sharp is building a market for 60-inch-and-larger panels for applications such as digital signage and is working to expand the market for large-size displays. For small- and medium-size LCDs, extremely adverse market conditions continue, including price drops and on-going commoditization of these devices. In response, Sharp will be implementing a drastic reorganization in the cost structures of its existing business, while working to transform this product category into a high-value-added business through the creation of new markets. For the whole of fiscal 2009, Sharp expects sales of LCDs to be 890.0 billion yen, down 15.6% compared to the previous year.

Despite the shrinking mobile phone market in Japan, Sharp worked to further expand its market share by introducing new products equipped with Sharp's proprietary devices such as high-quality CCD cameras and solar panels. Overseas, Sharp worked to increase sales and establish the Sharp brand, focusing on major urban areas in China. As a result, for the third quarter of fiscal 2009, sales of mobile phones were 121.8 billion yen, up 19.6% over the previous quarter. On a unit basis, sales were 2.90 million units, up 21.9%. Going forward, Sharp will work to take full advantage of these proprietary devices while pursuing the introduction of multifunction models based on an open source OS. In addition, Sharp will take steps to expand sales in China, progressing from major urban areas to smaller cities, and to explore entering markets in other emerging countries. For the whole of fiscal 2009, Sharp anticipates sales of mobile phones to be 470.0 billion yen, up 7.5% over the previous year, with sales on a unit basis of 10.70 million units, up 7.9%.

In Japan, in addition to offering subsidies for the installation of residential photovoltaic power generation systems, the government has started a new scheme of feed-in tariffs. This has led to the rapid growth of the solar market, centered on residential use. Overseas, the market is expected to grow in many parts of the world, including Europe; the U.S., where a full-fledged Green New Deal policy is to be implemented; and China, where the government is expected to institute measures to encourage the wider use of photovoltaic power generation systems. Sharp is building its solar cell business by manufacturing both crystalline and thin-film solar cells. For crystalline solar cells, Sharp is further strengthening its cost competitiveness by improving conversion efficiency and production efficiency, as well as working to expand application areas. For thin-film solar cells, Sharp is making preparations to start operation of a thin-film solar cell plant at GREEN FRONT SAKAI in March 2010. In addition, Sharp is taking proactive steps to globally expand local production for local consumption and the independent power producer business. One example is a joint venture with Enel Green Power and STMicroelectronics in Italy, which was announced recently. For the whole of fiscal 2009, Sharp anticipates solar cell sales of 200.0 billion yen, up 27.3% over the previous year, and a production volume of 770 MW, an increase of 82.9%.