Yahoo Finance Foxconn-Backed Sharp to End TV Display Production, Cut Staff
(Bloomberg) -- 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.
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The Japanese electronics maker is halting operations at its sprawling display factory in Sakai, Osaka, which would be used as a data center to power artificial intelligence, while scaling down production of small-to-medium-sized displays, President Robert Wu said on an earnings call Tuesday. 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 ($64 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, instead of an expected profit.
Sharp once dominated in panels for flat-screen TVs, with its Sakai plant as its centerpiece. 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 Co., also known as Foxconn, in 2016. 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.
(Updates with executive comments, earnings results)
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