Sharp to strip name from flagship LCD factory as Foxconn parent moves in

Sharp's Sakai facilities in central Japan are its technical pride and joy, but deep losses forced it to seek investors

Japan's Sharp said Thursday it will remove its name from a key LCD factory, as part of the completion of a major cash infusion from Foxconn Electronics' parent company, a symbolic move that reflects the shifting landscape of the electronics industry.

The company said it will next week rename subsidiary Sharp Display Products, which runs one of the world's most advanced LCD manufacturing plants, to Sakai Display Products, after the city in central Japan where it is located. The name change is part of a deal finalized today, in which Hon Hai Precision Industry acquires nearly half of the factory and a stake of almost 10 percent in Sharp. The deal was first announced in March.

The seemingly minor name change was once unthinkable for a proud Japanese manufacturer like Sharp, which has long trumpeted the facility as its flagship factory. But Sharp has struggled to boost profits as TV prices fall, while Hon Hai has become the world's largest electronics manufacturer, with clients that include Apple, Hewlett-Packard, Sony and Nintendo.

Sharp's decision to partner with Taiwan-based Hon Hai has been viewed within the country as a sign of the fading power of Japan's manufacturers. The Nikkei, Japan's main business newspaper, ran a story last month describing Sharp as "trembling" under the pressure applied by Hon Hai.

Sharp had long courted domestic rival Sony as a partner in the factory, but Sony is jettisoning manufacturing plants as it battles deep losses, especially in TVs. The companies said in May that Sony would sell its 7 percent stake in Sharp Display Products, receiving back the original 10 billion yen (US$130 million) investment it first made in 2009.

The Sakai plant currently makes massive panels best suited for large-screen TVs, though Sharp has said it will try to focus more on panels for smaller devices like phones and tablets.

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Jay Alabaster

IDG News Service
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