TOKYO -- Japanese medical equipment maker Omron will double its annual production capacity of liquid crystal display backlights, a key component of high-performance smartphones, to some 300 million units in China by 2016, spending 10 billion yen ($96.9 million).
The company made the decision after concluding that it will receive more orders for its high-performance LCD backlights in China, where smartphone sales are growing.
Omron will also double annual sales of the component to roughly 100 billion yen.
The Japanese firm and compatriot Minebea are the largest providers of LCD backlights in the world. Omron has about a 20% share of the global market for LCD backlights used in high-end smartphones. It excels in a technology to evenly spread the light given off by light-emitting diodes, the core of the backlight.
The technology enables clear image display and helps in the development of thin and light smartphones.
Omron's backlight business is handled by its subsidiary Omron Precision Technology. The company will bolster facilities at its three factories in the Chinese provinces of Guangdong, Jiangsu and Hunan. It will also add injection molding machines to make plastic parts and testing equipment.
Global cell phone shipments totaled 1.8 billion units in 2013, but are expected to increase to 2.4 billion in 2017.
Shipments of high-performance smartphones equipped with high-resolution LCD panels are projected to quadruple to 1.2 billion units in 2017.
Omron reported group sales of 773 billion yen in fiscal 2013. It plans to raise the figure to 900 billion yen in fiscal 2016 by adding some 50 billion yen with smartphone backlight sales.
Major Japanese electronic parts makers are focusing on increasing production of high-performance smartphone parts.
Kyocera will start operating a plant of resin substrates used in flat semiconductors in Ayabe, Kyoto, this summer after spending about 15 billion yen. The company aims to achieve some 20 billion yen in sales a few years later.
Murata Mfg. is also increasing production of parts for LTE (Long-Term Evolution) high-speed data service related equipment.