Sharp Expands South of the Border

It was a lesson in perspective this week in Baja California, Mexico, where Sharp Electronics officially cut the ribbon on a $300 million LCD manufacturing plant in Rosarito. While American journalists were busy scribbling notes about screen sizes (42-, 46- and 52-inch 1080p TVs for now) and production capacity (200,000 units per month, going up to 400,000 in 2009) Mexican journalists peppered local and national dignitaries with questions about environmental issues, work conditions at the maquiladora and Mexico's bid to rival China as a source of low-cost labor for the rest of the world.

The plant employs 2,300 people and will expand to 4,000 in 2009, according to Sharp. Pay for assembly line workers is $75 for a 5-day work week, according to our guide. Baja California governor Eugenio Elorduy told journalists that's 1.5 to 2 times the minimum pay range in the area and as much as 3-5 times the minimum wage of Mexico. Sharp has committed a day care center and a medical clinic to the campus and sponsors an annual beach cleanup event in the community.

Also on hand was Rocio Ruiz, Mexico's Subsecretary of Industry and Commerce, who stressed that the government is continuing to explore incentives to make sure international companies "keep coming to Mexico and not to China."

As for the impact of the plant on the flat-panel TV market, it can only help narrow the price delta between large-screen LCD and plasma TVs over the next few years. The plant will roll out mid-size LCD TVs for the first few years and is expected to also churn out 75- and 108-inch LCD TVs after Sharp's 10th-generation glass plant goes online in Japan in 2010.

Glass panels are shipped to the Rosarito plant from Japan where modules, backlight assemblies and cabinets are added to complete a TV. Manufacturing time is 2 hours from glass to shipping carton.--Rebecca Day