UPDATE 1-Sharp to cut LCD panel production - Nikkei

Aug 20 (Reuters) - Sharp Corp 6753.T will reduce LCD panel production for up to two months starting August, as television inventories pile up in the United States and China, which will also affect supplies to firms including Sony Corp 6758.T, the Nikkei business daily reported.

The company will lower the capacity utilization by 20-30 percent at its new Sakai factory, which makes panels 40 inches and up, the business daily said.

However, production of panels for Sharp’s own TVs will not be affected. It will continue to run at its Kameyama plant in Mie Prefecture that makes small- and mid-size TV panels, the business daily said.

LCD panels were in short supply in the first half of this year, but TVs have started piling up in the U.S. and Chinese warehouses as Chinese manufacturers’ production outpaced demand, it said.

Sharp reaffirmed its fiscal 2010 TV sales target of 15 million units, a rise of 47 percent from the previous year, the Nikkei said.

Sharp expects group operating profit to more than double to 120 billion yen. But a decline in panel sales to other companies will likely erode this figure by 10-20 billion yen, the daily reported. (Reporting by Swati Chitnis in Bangalore)