Reuters reports that Sharp Corp has significantly reduced iPad screen production as Apple began to manage demand and shift production. Reuters cites two sources as claiming Sharp has almost halted production of the 9.7-inch screen used in the iPad. According to those two sources, Apple is shifting demand to the smaller iPad mini.
The sources claim that Sharp's production line at the Kameyama facility in northern Japan is operating at a minimum level to keep the line running this month. This comes after a gradual slowdown began at the end of 2012 with Apple beginning to manage its inventory. Sharp has offered no official confirmation saying, "we don't disclose production levels."
Reuters' sources didn't indicate how much of the slowdown was the result of seasonal changes in demand after the holiday shopping season and how much the slowdown was due to consumers opting for the smaller and cheaper iPad mini. Research firm Macquarie Research estimates that iPad shipments will decline almost 40% during the current quarter to approximately 8,000,000 compared to the 13 million units in Q4.
A decline between Q4 with the holiday shopping season and Q1 is to be expected. The research firm notes that Apple's total tablet shipments will show a significantly smaller decrease due to strong iPad mini sales. Apple also gets iPad screens from LG Display Co., which is the biggest supplier, and Samsung Display. There have been no significant reduction in output reported for the other facilities.