2006 Press Meeting SHARP CORPORATION Katsuhiko Machida President January 11, 2006 I. Overview II. Policies for Key Businesses in FY2006 1. LCD TVs and Large-size LCDs 1998 Press Meeting ““Sharp Sharp to change all CRT TVs to LCD TVs in Japan by 2005 ” 2005” Almost achieved at the end of 2004 TV Demand (Japan) Millions of units 9 8.32 8.67 8 0.48 0.67 2.30 7 6 3.64 PDP TVs CRT TVs 5 LCD TVs 4 5.70 3 2 4.20 1 0 FY2005 FY2006 (Source: Sharp) TV Demand (Worldwide) Millions of units 180 160 160 172 5 8 5 5 140 120 100 80 130 123 Others PDP TVs CRT TVs LCD TVs 60 40 20 0 20 FY2005 36 FY2006 (Source: Sharp) ““Truly Truly the world ’s No.1 world’s LCD manufacturer ” manufacturer” Sharp LCD TV Sales (forecast) FY2005 4 million units(+47.1%) FY2006 6 million units(+50.0%) Large-size LCD Panel Production Capability 1. Kameyama No.1 Plant Capacity Enhancement Substrate input Apr. 2005 45,000 sheets per month Oct. 2005 51,000 sheets per month +33% Mar. 2006 60,000 sheets per month Investment:15 billion yen Large-size LCD Panel Production Capability 2. Kameyama No.2 Plant A. 8G substrate (2,160 x 2,400 mm) Best suited for panel production for LCD TVs of 40 inches and 50 inches B. Innovation of production process and revolution in LCD materials Color filter with inkjet method etc. Making LCDs cost -competitive with PDPs cost-competitive Large-size LCD Panel Production Capability Kameyama No.1 and No.2 Plant Kameyama No.1 Plant :suitable for 30 inches Kameyama No.2 Plant :suitable for 40 inches and 50 inches Establishing a production capability for any size of large-size LCDs Large-size LCD Panel Production Capability 3. Kameyama No.2 Plant Capacity Enhancement (The Second Phase) 2005 Press Meeting Increase substrate input from 15,000 sheets per month to 30,000 in 2007 Advanced scheduled increase date: March 2007(the end of FY2006) 4. Globalization of AQUOS - Production and Sales 1. Worldwide AQUOS production at 5 global bases 2. Locally oriented design and development 3. Simultaneous introduction of AQUOS with panels made in Kameyama No.2 plant 2. Mobile Phones and System LCDs New Services for Mobile Phones in Japan Starting in 2006 Apr. 2006 Terrestrial Digital Broadcasting for Mobile Nov. 2006 Mobile Number Portability Expanding Mobile Phone Business 1. Create one-of-a-kind products corresponding to new services in Japan 2. Supply to 3 Japanese carriers 3. Focus on 3G overseas. Creating one-of-a-kind products best suited to the overseas market Sharp Mobile Phone Sales (forecast) FY2005 11 million units(+10.2%) FY2006 13 million units(+18.2%) Shift from Amorphous Silicon LCDs to System LCDs System System LCDs LCDs (Current (Current type) type) System System LCDs LCDs (Amorphous-compatible (Amorphous-compatible type) type) add a new type same size Monolithic driver analog I/F User system Amorphous Amorphous silicon silicon LCDs LCDs digital I/F User system same I/F Driver IC (COG) digital I/F User system Sharp System LCD Sales (forecast) FY2005 220 billion yen(+17.6%) FY2006 260 billion yen(+18.2%) Sharp LCD Sales (forecast) FY2005 830 billion yen(+15.3%) FY2006 980 billion yen(+18.1%) 3. Photovoltaic Power Systems Photovoltaic Power System Demand (Worldwide) MW 1,250MW 1,400 1,200 1,000 1,000MW 867MW 800 600 400 200 0 FY2004 FY2005 (Forecast) FY2006 (Forecast) (Source: Sharp) Reduction of Generation Cost Current Generation Cost (Solar) Rate*for Household (Grid) Rate*for Industry (Grid) Generation Cost*(Thermal) 47 yen /kWh 23 yen /kWh (2010) 14 yen /kWh 7 yen /kWh (2020) (2030) *Japanese average Sharp Solar Cell Production Capacity < Katsuragi Plant > MW/year 500 400 300 200 100 0 2002/7 2003/3 2003/11 2004/6 2005/1 2005/11 Sharp Solar Cell Sales (forecast) FY2005 150 billion yen(+27.7%) FY2006 200 billion yen(+33.3%) III. Sales Target and Capital Investment for FY2006 Sharp Net Sales Target [ FY2006 ] 3 trillion yen (record high) FY2006 Capital Investment 275 billion yen (forecast) For LCDs : 190 billion yen (forecast)