Financial Material

For the second quarter of fiscal 2011 (July through September, 2011), sales of LCD TVs were 156.9 billion yen, up 1.7%, while on a unit basis, sales were 3.59 million sets, up 9.1%, both compared to the previous quarter (April to June, 2011). In Japan, market conditions remained difficult as a result of a slump in sales following the cessation of analog TV broadcasting and an on-going downward slide in ASP (average selling price) due to a shift in best selling models to small- and medium-size models intended as second and third TV sets in the home. However, overseas, sales of large-size models 60 inches and larger increased, centered in the U.S. As a result, we were able to significantly expand overseas sales, with increases of 52% in unit sales and 36% in monetary value, compared to the previous quarter. Models 60 inches and larger accounted for a higher percentage of products sold, particularly in North America (about 60% of total products sold), resulting in a rapid rise of approximately 40% in the total value of sales. This helped the LCD TV business in North America return to profitability. For the second half of fiscal 2011, Sharp is working to expand sales of LCD TVs which features a slim, lightweight design that enables these models to be moved and installed freely based on wireless technology. In addition, for large-size TVs, we will aggressively introduce 80-inch models. Through these initiatives, Sharp is working to improve its brand image and pursue new markets by continuing to enhance and strengthen its lineup of LCD TVs, and by actively growing its business in key regions throughout the world, particularly in the U.S. For the fiscal year ending March 31, 2012, Sharp is projecting sales of LCD TVs of 640.0 billion yen, down 20.4%, and on a unit basis, sales of 13.50 million sets, down 8.9%, both compared to the previous year. Sales of LCDs were 221.8 billion yen, up 18.0% compared to the previous quarter. Sharp continues to make progress in its LCD business restructuring. Regarding Sharp’s initiative of strengthening its mobile LCD business for which the Kameyama Plant will serve as the production hub, we are proceeding as scheduled in installing production lines for mobile LCDs for smartphones in the Kameyama No. 1 Plant. We have also completed the conversion of some of the lines at the Kameyama No. 2 Plant to lines for the manufacture of mobile LCDs as planned. This will allow us to initiate production of LCDs using oxide semiconductor (IGZO). Regarding Sharp’s initiative of expanding its large-size LCD business by emphasizing LCD panels for large-size TVs 60 inches and larger as well as for non-TV applications, with the market moving steadily to larger screen sizes, we have increased LCDs 60 inches and larger to well over 50% of total production volume at the LCD panel plant at GREEN FRONT SAKAI. We believe that we can continue stable operation by expanding our lineup of large-size LCDs and by taking advantage of the features of the world’s only 10th-generation LCD panel plant. Together with the initiatives taken in our mobile LCD business, we will strive to make our LCD business strong and profitable. For the fiscal year ending March 31, 2012, Sharp is projecting sales of LCDs of 900.0 billion yen, down 12.4%, compared to the previous year.

Sales of mobile phones were 80.1 billion yen, down 13.4%, and unit sales were 2.00 million units, down 4.6%, compared to the previous quarter. Although the business environment remains extremely challenging, Sharp is maintaining its top market share in Japan by introducing smartphones that make full use of Sharp’s distinctive strengths, including models with functions to connect wirelessly with AQUOS LCD TVs, as well as handsets featuring both high image quality and low power consumption. For the fiscal year ending March 31, 2012, Sharp is projecting sales of mobile phones of 340.0 billion yen, down 17.7%, and on a unit basis, sales of 9.00 million handsets, down 7.6%, both compared to the previous year.

Sales of solar cells were 59.2 billion yen, up 15.5%, and on a production volume basis, sales were 319MW, up 22.9%, both compared to the previous quarter. We continue to maintain profitability in Japan, where greater awareness of energy conservation and increased interest in renewable energy have led to higher demand. Overseas, however, we are faced with a deterioration in profitability, caused by such factors as financial instability in Europe, main market, slower demand due to the revision of feed-in tariffs in various countries, subsequent price declines, and ongoing yen appreciation. To respond to this, Sharp is working to transform its business structure and profit structure by promoting local production for local consumption and reinforcing efforts in downstream areas. Examples of these initiatives include alliance with Enel Green Power in Italy and acquisition of Recurrent Energy, LLC in the U.S. We are moving ahead with optimization of procurement, production and sales at the global level, as well as a shift from stand-alone module sales to system sales, and to the power generation business. In Japan, Sharp will work to strengthen product development, as well as marketing and support, for industrial applications such as large-scale solar power generation systems for which the market is expected to grow in the future. We will also expand single crystalline solar cells with high conversion efficiency, while reviewing and optimizing our production framework in Japan. In this way, Sharp is committed to growing its business and building a solid base of profitability, with the aim of becoming a solar energy solutions company, expanding its business broadly across the value chain in Japan and overseas. For the fiscal year ending March 31, 2012, Sharp is projecting sales of solar cells of 240.0 billion yen, down 9.6%, and on a production volume basis, sales of 1,350MW, up 8.7%, both compared to the previous year.