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Sharp Corporation

 


Address:
22-22 Nagaike-cho
Abeno-ku
Osaka 545
Japan

Telephone: (81)6-621-1221
Fax: (81)6-628-1667


Statistics:
Public Company
Incorporated: 1935 as Hayakawa Metal Industrial Laboratory
Employees: 60,000
Sales: ¥1.49 billion ($13.3 billion)
Stock Exchanges: Tokyo Osaka Nagoya Paris Luxembourg Zurich Basel Geneva
SICs: 3631 Household Cooking Equipment; 3651 Household Audio & Video Equipment; 3579 Office Machines, Not Elsewhere Classified; 3661 Telephone & Telegraph Apparatus


Company History:

The Sharp Corporation is one of the largest and oldest Japanese consumer goods manufacturers. Founded on a business creed reminiscent of the ancient trading houses--Sincerity and Creativity--and built largely on the hard work and determination of one man, Sharp is in many ways Japan's most "traditional" modern electronics manufacturer. Sharp remains an outward-looking, international corporation, as dedicated in each of its foreign markets to assimilation as to overall success.

The company was founded as a small metal works in Osaka in 1912 by an inventor and tinkerer named Tokuji Hayakawa. After three years in business, earning a modest income from gadgets and repair jobs, Hayakawa engineered a mechanical pencil he called the "Ever-Sharp." Consisting of a retractable graphite lead in a metal rod, the Ever-Sharp pencil won patents in Japan and the United States. Demand for this simple and durable instrument was immense. To facilitate greater production, Hayakawa first adopted an assembly line and later moved to a larger factory.

Hayakawa's business, as well as his life, were ruined on September 1, 1923. On that day, the Great Kanto Earthquake caused a fire which destroyed his factory and took the lives of his wife and children. Hayakawa endured severe depression; it was a year before he re-established his factory. The Hayakawa Metal Industrial Laboratory, as the company was called, resumed production of the Ever-Sharp pencil, but Hayakawa became interested in manufacturing a new product: radios.

The first crystal radio sets were imported into Japan from the United States in the early 1920s. Hearing one for the first time, Hayakama immediately became convinced of its potential. With little understanding of radios, or even electricity, he set out to develop Japan's first domestically-produced crystal radio. After only three months of study and experimentation, Hayakawa succeeded in receiving a signal from the broadcasting service which had begun programming&mdashø a very small audience--only a few months before, in 1925.

The radio entered mass production shortly afterward, and sold so well that facilities had to be expanded. Crystal radios, however, are passive receivers whose range is limited. Hayakawa felt that powered radios, capable of amplifying signals, should be the subject of further development. While competitors continued to develop better crystal sets, Hayakawa began work on an AC vacuum tube model. When the company introduced a commercial model, the Sharp Dyne, in 1929, Sharp was firmly established as Japan's leading radio manufacturer. The company expanded greatly in the following years, necessitating its reorganization into a corporation in 1935.

The laboratory, for all its success, was not a leader in a wide range of technologies; it led only in a narrow section of the market. In addition, the company did not have the benefit of financial backing from the zaibatsu conglomerates or the government. It was, in the realm of the national modernization effort, an outsider. This may have been its saving grace, however, as the government had become dominated by a group of right-wing imperialists within the military. Whatever their political opinions, the leaders of Japan's largest corporations were compelled to cooperate with the militarists in their quest to establish Japanese supremacy in Asia. Hayakawa, on the other hand, was for the most part left alone.

During World War II, Hayakawa and his company were forced to produce devices for the military, and even to restructure, as new industrial laws intended to concentrate industrial capacity were passed. Renamed Hayakawa Electrical Industries in 1942, the company emerged from the war damaged but not destroyed. While other industrialists were purged from public life for their support of the militarists, Hayakawa was permitted to remain in business. His biggest concerns were rebuilding his company and surviving Japan's postwar recession.

By 1950 more than 80 of Hayakawa's competitors were bankrupt. But Hayakawa's officials personally guaranteed the company's liabilities when the company suffered a critical drop in sales, and Hayakawa Electric was able to obtain the cooperation of major underwriters until the first major expansion in the Japanese economy occurred in 1952.

Hayakawa considered television, a field that had not yet proved commercially successful, a highly promising new area. The company began development of an experimental TV set in 1951, even before plans had been made to begin broadcasting in Japan. Two years later, when television broadcasting started, Hayakawa Electric introduced its first commercial television set under the brand name "Sharp," in honor of the pencil. Hayakawa's good timing was essential in allowing the company to establish and maintain a significant and profitable market share.

The company started development of a color television in the mid-1950s. In 1960, with the advent of color broadcasting in Japan, Hayakawa introduced a line of color sets. This was followed in 1962 by a commercial microwave oven, and in 1964 by a desk-top calculator. The Compet calculator, which looked like an adding machine, was the first in the world to use transistors. In 1966 the microwave oven received a rotating plate and calculators shrank with the use of integrated circuits.

Hayakawa recognized the great sales potential of the United States; a sales subsidiary was established in 1962. It served the dual purpose of facilitating sales and observing the market. By the late 1960s, the Sharp brand name had become well-established in North America. Sales in the United States provided the company with a large and increasing portion of its income. In addition, subsidiaries were established in West Germany in 1968 and Britain in 1969.

Hayakawa Electric made two major breakthroughs in 1969. That year the company introduced the Extra Large Scale Integration Calculator, a device now reduced to the size of a paperback book. The other new product was the gallium arsenide light-emitting diode (LED)--in effect, a tiny computer light. Like the radio and television before them, improved versions of both the calculator and LED were subsequently introduced in future years.

Tokuji Hayakawa retired from the day-to-day operations of his company in 1970, assuming the title of chairman. He was replaced as president by Akira Saeki, a former executive director. Saeki oversaw an important reorganization of the company intended to establish a new corporate identity and unify product development efforts. That year, Hayakawa Electric Industries also adopted its new name: Sharp Corporation.

Saeki, who witnessed the Apollo moon landing while in America, decided that the company's future efforts should center on the development of semiconductors, the electronic components which had made the lunar mission possible. He initiated construction of a massive research complex called the Advanced Development and Planning Center. The project was a significant investment for Sharp, since its budget was already seriously strained by the construction of an exhibit for Expo '70. Nevertheless construction was begun on a 55-acre research complex in Tenri, Nara Prefecture.

During the 1970s, Sharp consolidated its position in consumer goods by broadening its product line to include refrigerators, washers, portable stereos, copiers, desk-top computers, video equipment, and Walkman-type headsets. Profit generated from consumer goods sales was largely invested in the Tenri facility. When completed, the research complex cost ¥7.5 billion, representing about 70 percent of Sharp's capitalization.

Perhaps the most important product to come out of the Tenri research facility was the Very Large Scale Integration (VLSI) factory automation system. Building upon existing integration technologies, VLSI production lines enabled manufacturers to reduce defects and raise productivity through the use of industrial robots and other mechanical apparatus.

In an effort to head off impending protectionist trade legislation, Sharp built new factories in its largest overseas markets, principally the United States. The company's decision to build a plant in Memphis, Tennessee was criticized at first. RCA had closed a plant in Memphis in 1966, favoring production in Taiwan. Sharp maintained that RCA had merely suffered from inept management and went ahead with the plant. By pushing its American suppliers for parts with zero defects and incorporating the Japanese concept of full worker involvement, the Memphis plant proved highly successful.

President Saeki retired in 1986, continuing to serve the company as an advisor. He was succeeded by Haruo Tsuji, a "numbers man" with an exemplary record in middle and upper management. Through its 18 divisions, Sharp had diversified during Saeki's tenure into a wide range of consumer products. By the time of his retirement, Sharp operated 12 research laboratories and 34 plants in 27 countries and its employees were equally divided between Japan and foreign countries. The logistics of running a truly international corporation took their toll on Sharp's earnings, however. Largely due to a strong appreciation in the value of the yen, Sharp's earning for the year plunged 42 percent to ¥20.78 billion ($137.5 million). Nevertheless, Saeki had left his company poised for a future of vigorous growth.

While rivals Sony and Matsushita expanded through acquiring a number of Hollywood-based entertainment companies during the 1980s, Sharp focused on research and development. In consumer electronics and appliances, the company engaged in a measured effort to move upmarket, offering more expensive, but higher-quality, products. By the late 1980s, Sharp had offered a number of innovations in its product line such as a video disc player capable of reproducing three-dimensional images, a cordless telephone with a 100-meter range, and Zarus, a highly successful computerized personal organizer, capable of reading handwritten Japanese text.

Most fruitful, however, was Sharp's continual development of liquid crystal display (LCD) technology. By the mid-1980s, Sharp was the market leader in LCD technology, which it had parried into a number of high-definition color televisions. In 1989, Tsuji appointed Kiyoshi Sakashita, a board member and an expert in industrial design, to lead a team of 50 engineers to further exploit its LCD technology. Three years and countless brainstorming sessions later, Sharp unveiled ViewCam, an ingeniously redesigned video camcorder that presented the image on a four-inch LCD screen as it was being recorded. First shown at Japan's prestigious consumer electronics show in Osaka, Sharp's ViewCam "set the industry abuzz," according to the Far Eastern Economic Review. The ViewCam competed heavily against Sony's best-selling Handycam. Within two years, over 1.6 million ViewCam units were sold, at an average price of ¥223,000 ($2,275).

In the early 1990s, the company completed two new research and development centers: the Makuhari Building in Tokyo, which focused on multimedia, networking, and software for advanced information systems; and Sharp Laboratories of Europe Ltd. in Oxford, United Kingdom, which focused on areas of artificial intelligence such as pan-European translation technology and opto-electronics. In 1992 alone, the company spent over ¥100 billion on research and development. Sharp also fortified its television manufacturing operations in the United States, Spain, Thailand, and Malaysia, and entered into key relationships with Intel Corporation and Apple Computer, Inc. to jointly develop flash memory chips and personal information equipment.

As it celebrated its 60th anniversary, Sharp's continuous focus on research and development was beginning to pay mightily. Fueled by the success of ViewCam, Zarus (and its American counterpart Newton, which Sharp manufactured and Apple Computers developed and marketed), Sharp's 1993 profits outpaced those of its Japanese rivals, although its sales were considerably smaller. By mid-1994, Far Eastern Economic Review announced that Sharp was "poised to usurp Sony as the electronics maker to watch in the 1990s&mdash′oviding it can keep churning out goods products." Given its strong and continuous commitment to finding new technologies, Sharp was in an excellent position to do just that.

Principal Subsidiaries: Sharp Electronics Corporation (U.S.); Sharp Manufacturing Company of America; Sharp Microelectronics Technology Inc. (U.S.); Hycom Inc. (U.S.); Sharp Electronics of Canada Ltd.; Sharp Electronics (Europe) GmbH (West Germany); Sharp Electronics (Svenska) AB (Sweden); Sharp Electronics (U.K.) Ltd.; Sharp Precision Manufacturing (U.K.) Ltd.; Sharp Electronics GmbH (Austria); Sharp Electronics (Schweiz) AG (Switzerland); Sharp Electronica Espana S.A.; Sharp Corporation of Australia Pty. Ltd.; Sharp Manufacturing France S.A.; Sharp-Roxy Sales (Singapore) Pte. Ltd.; Sharp Electronics (Singapore) Pte. Ltd.; Sharp Electronics (Taiwan) Company Ltd.; Sharp Appliances (Thailand) Ltd.; Sharp-Roxy (Hong Kong), Ltd., Sharp Thebnakorn (Thailand) Co. Ltd. (STLC), Sharp-Roxy Electronics (Maliysia) Corporation (M) Sdn. Bhd. (SREC), Sharp Laboratories of Europe (England) Ltd.





Further Reading:


Eisenstodt, Gale, "Unidentical Twins," Forbes, July 5, 1993, p. 42.
Friedland, Jonathan, "Sharp's Edge: Prowess in LCD Screens Puts it Ahead of Sony," Far Eastern Economic Review, July 28, 1994, p. 74.
Gross, Neil, "Sharp's Long-Range Gamble On its Innovation Machine," Business Week, April 29, 1991, pp. 84-85.
Morris, Kathleen, "The Town Watcher," Financial World, July 19, 1994, pp. 42-45.
Teresko, John, "Japan: Reengineering vs. Tradition," Industry Week, September 5, 1994, pp. 62-70.

Source: International Directory of Company Histories, Vol. 12. St. James Press, 1996.




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