Sharp Corp., Japan's largest maker of liquid crystal displays, will start making smaller screens at a television panel plant to meet demand for mobile devices.

Sharp will produce small and medium-size displays using oxide semiconductors at its No. 2 plant in the city of Kameyama, Mie Prefecture, by the end of the year, the Osaka-based company said in a statement. The factory will continue to produce TV panels, according to the statement.

"It makes sense for Sharp to focus more on smaller panels where the demand-supply balance has been tight," said Shiro Mikoshiba, an analyst at Nomura Holdings Inc. Stiff competition in large panels will likely continue due to sluggish demand for LCD TVs, he said.

Sharp suspended operations at its two biggest LCD factories earlier this month because of a shortage of gas needed for production.

The company is prioritizing the use of scarce materials to make smaller LCDs because of stronger demand, Sharp said April 11.

Its so-called eighth-generation production line at Kameyama was started in 2006 and is designed to make 40-inch and 50-inch panels.

LCD shipments to fall

Liquid-crystal display shipments will likely fall this quarter as television makers in Japan and China scale back purchases, Barclays PLC said Thursday.

Global LCD shipments may fall 1.1 percent from a year earlier to 45.7 million units, the investment bank said. LCD factories will probably produce at 74.7 percent of capacity during the quarter, the lowest utilization ratio in more than two years, it said.

Sony Corp., Samsung Electronics Corp. and other TV makers are probably revising orders as their TV sales targets were optimistic, the report said. Sharp Corp.'s suspension of some production is also undermining industry shipments, it said.