FOXCONN-backed Sharp Corp is exiting TV panel production and plans to seek volunteers for early retirement, abandoning a business in which it lost out to Chinese rivals.
The Japanese electronics maker is halting operations at its sprawling display factory in Sakai, Osaka, which would be used as a data centre to power artificial intelligence, while scaling down production of small-to-medium-sized displays, president Robert Wu said on an earnings call on Tuesday (May 14). The company also seeks to sell its electronics device segment, which includes camera modules and semiconductors, he said.
Sharp said it will power off the TV panel plant by September, after it failed to secure buyers and partners for what was once the world’s biggest liquid crystal display factory. Sharp had been seeking companies willing to use the space to make semiconductors.
The announcements came after Sharp forecast an operating income of 10 billion yen (S$86.5 million) for the fiscal year to March, roughly a quarter of the average of analyst estimates, despite netting sales that hewed closer to expectations. In the quarter ended in March, it reported an operating loss of 16.8 billion yen, instead of an expected profit.
Sharp once dominated in panels for flat-screen TVs, with its Sakai plant as its centrepiece. But Chinese rivals quickly overtook the Japanese firm, building larger factories and selling displays at far lower prices, leaving the Sharp facility with idled capacity.
Mounting losses brought Sharp to the brink of bankruptcy, before it received a capital injection from Taiwan’s Hon Hai Precision Industry, also known as Foxconn, in 2016.
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Foxconn has sought to leverage Sharp’s brand and its own vast distribution channel to sell TVs with Sakai-made panels. But those efforts have been frustrated by weak overall consumer demand. BLOOMBERG
