Sharp will reportedly decrease small- to medium-size panel production at its Kameyama Plant No. 2 in Japan by as much as 40% in 2015 as handset panel demand in China has been weak coupled with rising competition from local makers, according to a new report from Tech News.

The report cited Japan-based media reports stating that Sharp will reduce production output from about 1,200 substrates a day in 2014 to about 700-800 in 2015 as China handset reserves remain high and price competition increases.

Local makers have reduced prices for higher-end panels and have begun increasing production, which is proving challenging for Sharp as it previously increased production in order to meet demand from China-based vendors.

Sharp has focused on production of IGZO technology at the Kameyama Plant No. 2 and is expected to allocate the left over production capacity for producing TV panels, the report said. adding that Sharp is likely to incur losses from the move.