Struggling Sharp Corp. will set up a joint venture in China with Nanjing China Electronics Panda Group Corp., a major maker of liquid crystal display panels, to produce LCDs starting in 2015 at the earliest, sources said Wednesday.
The Osaka-based company, which has been hit by slumping LCD TV and panel sales amid stiff competition from overseas rivals, will invest tens of billions of yen in the venture and provide technology for its new power-saving, crisp-resolution Igzo LCD panels, the sources said.
Sharp has been cautious about providing the technology, but it apparently has decided to place priority on rebuilding its business rather than maintaining exclusive control over its expertise.
The move follows Sharp's capital and business tie-ups with U.S. telecom device maker Qualcomm Inc. and South Korean rival Samsung Electronics Co.
Under the tie-up plan, the two companies will first jointly make large-size LCD panels for televisions that don't require Igzo technology at a new plant constructed in Nanjing by CEC Panda with capital of about ¥300 billion.
They will eventually produce small and midsize Igzo LCDs for smartphones and tablet computers, the sources said. Sharp will provide technological assistance in China while securing the right to procure some panels, they said.
Sharp and CEC Panda's state-run parent company, China Electronics Corp., agreed in 2009 to hold talks for joint production of LCD panels.
Sharp has sold manufacturing facilities for LCD panels at its Kameyama No. 1 plant in Mie Prefecture to Beijing-based CEC, but joint production has been delayed due to the fallout from the Senkaku Islands dispute.
Sharp is aiming to expand sales of LCD panels to Samsung and others and book sales of ¥1.05 trillion from its LCD business in the business year ending in March 2016, the final year of its medium-term business plan.