Sharp Corp. is in talks with a major Chinese electronics maker SVA (Group) Co. to jointly produce liquid crystal display panels for TV sets, paving the way for its first attempt to produce the products offshore, sources familiar with the talks said Saturday.
Sharp has been producing LCD panels and exporting them overseas, but since the yen's appreciation has eroded its profits, Sharp wants to shift production overseas to boost its competitiveness, the sources said.
Sharp is also considering an alternate plan to sell production equipment at its Kameyama factory in Mie Prefecture to SVA so the Chinese company can make the TV panels, the sources said.
Sharp is hoping to reach a basic agreement by spring, the sources said.
The No. 1 plant at the Kameyama factory has suspended production of the so-called sixth generation panels, while the No. 2 plant makes eighth-generation panels. Sharp has been trying to remodel the No. 1 plant to build small and midsize panels.
If the deal with SVA is reached, Sharp will suspend the remodeling process and transfer its equipment to China, the sources said, noting that other Chinese companies could emerge as potential partners.
SVA is hoping to produce LCD panels through a joint venture with Sharp so it can reduce investment costs, they added. Sharp is believed to prefer the option of selling its equipment to the Chinese firm.