Sharp cautious on solar cells' brisk growth - (PV in Japan)

source: Edmund Klamann yahoo bizwire 2001.12.03

TOKYO, Dec 3 (Reuters) - Sharp Corp, the world's largest photovoltaic cell maker, said on Monday it hopes solar cell
production will continue growing briskly at 40 to 50 percent a year, although it remains cautious due to reliance on subsidies.

``For the next few years we hope to keep up the current pace of growth,'' Takashi Tomita, head of Sharp's photovoltaic systems operations, told a briefing for reporters.

The company, also Japan's largest liquid crystal display maker and a major consumer electronics manufacturer,
expects photovoltaic sales of 18.4 billion yen ($149.2 million) in the second half of the business year to March,
up 35 percent from the first half. The full-year estimate of 32 billion is up 55 percent from the prior year's result, although it is only a small fraction
of the company's total 1.8 trillion yen in consolidated revenues forecast for 2001/02.

The optimism for growth was tempered, however, by uncertainties in the market and the need to cut costs. ``This is an operation that is built on subsidies, so we are cautious and keeping an eye on market conditions,'' Sharp Executive Director Zenpei Tani said.

He added Sharp's photovoltaic operations were just about breaking even with help from government subsidies launched in the early 1990s. The company said that, with subsidies, a typical three-kilowatt home solar power system can now be bought for about 800,000 yen, or one-third the cost seven years ago, during the first year of the government subsidy plan for home systems. In 2001, the government is paying a 120,000 yen subsidy for each kilowatt of power.

SUBSIDY-DEPENDENT

Tani noted that, while photovoltaic power in Japan tended heavily toward roof-mounted cells for home power generation, in Europe the cells were often used by
small-scale commercial power suppliers.

Sharp estimated industry-wide solar cell output would continue rising at an annual rate of 40 to 50 percent over the next several years, with Japan accounting for
over 50 percent of global production by 2003, or 500 out of 911 megawatts. The company cited estimates that it held a 17.5 percent share of the market last year,
producing 50.4 megawatts of photovoltaic cells, followed by Kyocera Corp at 14.6 percent.

This summer Sharp boosted output capacity to 94 megawatts, or nearly one-tenth the generating capacity of a typical nuclear reactor, and with facilities operating
above 100 percent capacity it aimed to produce about 94 megawatts of cells in the business year to next March.

``This year (production) is about 10 to 20 percent short of what we need,'' Tani said.

Rival Sanyo Electric , based like Sharp in the western Japan metropolis of Osaka, has also set ambitious targets for photovoltaic cell production of 120 megawatts
by 2005, or seven times the current level.

Sharp's shares ended Monday trade down 1.44 percent at 1,575 yen, outperforming the benchmark Nikkei average's three percent slide.

For the year to date Sharp has gained 14.3 percent, handily outdistancing the Nikkei's 24.8 percent slide and losses across the high-tech sector, as investors smiled
on its relatively strong profit performance and popular products such as flat-panel televisions and colour-screen mobile phones.