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Electronics

Sharp affiliate sues Corning for allegedly breaking glass supply deal

Lawsuit alleges output from Japan plant sold to third parties without consent

OSAKA -- Sharp affiliate Sakai Display Products has requested an injunction against the Japanese arm of Corning, to stop the glassmaker's alleged sale to third parties without SDP's consent in violation of a contract between the two companies.

SDP sources all the glass for its liquid crystal display panels from Corning's facility in the city of Sakai in Osaka Prefecture, where SDP is based, and the agreement lets Corning sell to other customers only if it has extra capacity after that. But Corning has supplied glass to other panel makers without meeting SDP's needs first, according to the filing submitted to the Osaka District Court on Thursday.

A shortage of glass could affect SDP's ability to churn out panels at a time when demand for televisions is running especially high as the pandemic keeps people cooped up in their homes.

The filing also accuses Corning of violating a contract with SDP by making glass in unapproved sizes.

Corning leases the land for the Sakai plant from Sharp and the building from SDP, and the rental contract stipulates that Corning must first get written consent before manufacturing types of glass other than those agreed to beforehand. SDP alleges that Corning is making glass in other sizes without such an agreement, and supplying it to other customers in China or elsewhere.

Prices for some LCD panels have been rising as the surge in TV sales squeezes supply, and in China in particular, panel makers reportedly have been unable to source enough glass to fully ramp up production.

SDP produces large panels for TVs and other devices. A prolonged shortage of glass could not only cut into its panel output, but potentially also put jobs at its production facilities at risk.

"We will take all measures necessary to secure glass for our LCD panels," SDP said. Corning Japan declined to comment.

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