Sharp's board of directors on June 27 has approved the company's plan to enter into a $2.9 billion business alliance relating to liquid crystal displays with China Electronics Co rporation.
The new venture will be 92 percent owned by China Electronics, also known as CEC. The venture will set up a an LCD plant with the goal of mass-producing panel displays for televisions, notebook PCs and tablets in 2015.
Sharp will be also licensing IGZO, or indium gallium zinc oxide displays. IGZO screens boast power consumption as low as a tenth of conventional LCDs, high resolutions and faster reaction speeds.
Sharp is the only panel maker in the world to have built a tenth generation factory able to fabricate liquid crystal sandwiched in glass sheets thinner than a credit card that are 3.13 meters long by 2.88 meters wide. Smaller 8.5 generation sheets measure 2.2 meters by 2.5 meters.
In 2009, Sharp had accepted an order for the 6th generation LCD panel production project (from LCD business company Nanjing CEC - PANDA LCD Technology Co., Ltd., established by Nanjing-City and Nanjing China Electronics Panda Group Corporation. The production has commenced in May, 2011. Thereafter, input capacity was steadily expanded, establishing a mass-production system by the end of 2012.
Further, when this project was accepted, in order to prepare for the expansion of demand for LCD panels in China, following the production of 6th generation LCD
panels, Sharp had decided to pursue discussions regarding a joint venture for the
production of 8th generation LCD panels with the Nanjing - City and China Electronics, the parent company of CEC Panda. In this context, along with providing high definition TFT-LCD panels and module technology to CEC, both companies have agreed to operate a plant for the 8.5th generation LCD panels and modules utilizing the technology as a joint venture along with investment by Sharp. With commencement of mass-production scheduled in or after 2015, it is assumed that main applications will be for television sets, notebook PCs and tablets.
Sharp reserves the right to purchase the price-competitive LCD panels that will be produced at the plant.
Sharp's ongoing business restructuring pllan is aimed at reducing assets
through optimization of the value chain, and, in the current approach, Sharp
will enhance global competitiveness by optimally combining technology, human
resources and production for each value chain, such as technology development in Japan, panel planning in the countries or regions close to consumer markets,
and production in the countries or regions taking advantage of low production cost infrastructure, respectively.
By combining advanced LCD of Sharp with the highly efficient technology of
the strategic partner CEC, Sharp hopes to establish a system to provide highly competitive LCD panels and modules in a stable and timely manner, and grow
its LCD business.
To rebuild its business, Sharp has also sought closer ties to Samsung Electronics, selling it a 3 percent stake for $103 million and pledging to supply it with small display screens.