Quitting the calculator price war for semiconductors and LCDs (1973)

Compete on price, or make the difference with your own technology

The heart of this decision was to step out of a price war with no visible winner and pour Sharp’s technology and capital into semiconductors and liquid crystals — core devices of its own. The calculator business was sinking into a war of attrition fought over whether prices could be driven below $36 (¥10,000). What Sharp chose was not to stay in the race to build ever cheaper, but to make for itself the components no rival yet had, and to set its products apart on what was inside them. That it kept investing even as people said “Sharp will be ruined by its semiconductor spending” shows a management that put the accumulation of technology ahead of near-term returns.

That said, this choice was no straight road to success. In the microprocessor — an outgrowth of the calculator’s circuitry — Sharp lost the initiative to America’s Intel, and its later concentrated investment in liquid crystals would pass through vast spending on large-panel plants and a steep fall in earnings before leading to the 2016 change of control. Even so, the 1970s choice to make a difference with its own technology rather than wear itself out on price became the starting point for both the brilliance of the years it was called the “LCD kingdom” and the trials that followed. Betting on proprietary devices in the middle of a price war, this decision put — early on — the question a technology-led company must forever face at the very centre of its management.