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Sharp mulls overhaul of LCD business amid fierce competition

Sharp mulls overhaul of LCD business amid fierce competition

A Japanese state-backed investment fund is said to be in talks over Sharp's panel business

Struggling electronics maker Sharp said Monday it is grappling with how to reform its LCD panel business, but has yet to make any decisions.

Kyodo News and other media reported that Sharp plans to spin off its business for small and mid-size LCD panels, used in smartphones and other mobile devices, by getting the state-backed Innovation Network Corporation of Japan (INCJ) to invest ¥100 billion (US$840 million) in a new subsidiary.

INCJ would control a roughly 40 percent stake in the LCD subsidiary, according to the reports. Sharp, however, denied that any plans have been made regarding its own business.

"We are currently considering various possibilities for fundamental structural reforms including LCD business, but there are no specific decisions made at this time," Sharp spokeswoman Miyuki Nakayama said via email.

She added that the company is reviewing its medium-term management plan and the results will be announced around May.

In its latest earnings release covering the nine months to Dec. 31, 2014, Sharp said sales in its LCD business were down about 7.6 percent. It blamed rapid foreign exchange fluctuations and falling prices for small and mid-size LCD panels. Chinese and Korean makers have been a source of fierce competition in the mobile device screen market.

An INCJ spokeswoman declined to comment on the reported talks with Sharp. In addition to the TV maker, INCJ is also backed by over two dozen Japanese companies including Sony, Hitachi and Toshiba. In 2012, INCJ helped launch Japan Display, which brought together the small and midsized display businesses of those three companies.

Japan Display has since emerged as a competitor for small LCD panels, producing iPhone screens and other products. In February, Japanese media reported that it was in talks with Apple to build a new screen factory in Japan.

Over the past year, Sharp has turned out thin-bezel, high-def displays for its Aquos Crystal smartphone, as well as prototype 70-inch capacitive LCD panels that are sensitive enough to respond to brushstrokes.

Tim Hornyak covers Japan and emerging technologies for The IDG News Service. Follow Tim on Twitter at @robotopia.

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