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Sharp may sell off its smartphone LCD display business
Sharp, which manufactures a variety of liquid crystal displays (LCD) for mobile devices, is looking to spin off part of its panel making unit, say reports from Japan’s manufacturing industry. The company is facing its third annual net loss in the past four years and is promising a restructure in exchange for renewed funding. In exchange for extra cash, Sharp will apparently sell off part of its struggling LCD business.
Sharp is seeking a capital injection of around 100 billion yen from Innovation Network Corp. of Japan (INCJ), a fund overseen by the country’s Ministry of Economy. Japan’s government launched the INCJ fund in 2009, in a bid to improve the competitiveness of its technology sector, and already owns 35 percent of rival manufacturer Japan Display.
Part of the reason why Sharp may be looking to spin off its LCD business is due to the increasingly tough competition. The dominance of Samsung’s impressive AMOLED technology in its high-end devices has put increasing pressure on LCD developers to improve their technology. Simultaneously, South Korea’s LG Display and local rival Japan Display have both been aggressively marketing their panels to a variety of smartphone manufacturers, including those in fast growing markets such as China. Sharp accounts for roughly a third of unit shipments to Chinese manufacturers, but is facing tough competition over pricing.
Sharp has previous denied rumors that it would be selling its LCD unit. However, a spokesman recently confirmed that the company is considering reforms to its LCD business, although no decisions have yet been finalized. Restructuring plans are expected to be announced in May.