Sharp's Plan to Sell Japan LCD Plant to Parent Foxconn Falls Through
•February 10, 2026
0
Why It Matters
The failed transaction forces Sharp to absorb significant restructuring losses and accelerate workforce reductions, while Foxconn’s pivot to AI servers signals a strategic shift in Taiwan’s manufacturing focus amid a softening LCD market.
Key Takeaways
- •Sale of Sharp's Kameyama No.2 plant collapsed
- •1,170 jobs targeted for early retirement
- •Restructuring loss of ¥12.9 billion recorded FY2026
- •Foxconn may repurpose site for AI server production
- •Sharp's profit rebounds despite 14.5% revenue drop
Pulse Analysis
Sharp’s Kameyama No. 2 plant, once a flagship LCD TV production line, has been a cornerstone of Japan’s display industry since 2004. The facility’s sale to Hon Hai Precision Industry (Foxconn) was part of a broader effort to streamline Sharp’s operations after years of losses. However, Foxconn’s assessment that future LCD panel pricing would erode profitability halted the deal, leaving Sharp to shoulder the restructuring burden and confront a rapidly contracting display market dominated by Chinese rivals.
The abrupt collapse of the sale triggers a cascade of cost‑saving measures. Sharp will cease production by August and implement an early‑retirement program affecting 1,170 workers, incurring ¥14.9 billion in restructuring expenses, including a ¥12.9 billion extraordinary loss booked for FY2026. While the plant shutdown reduces capacity, Foxconn’s interest in converting nearby space to AI‑focused server manufacturing reflects a strategic pivot toward higher‑margin, growth‑oriented segments, potentially offsetting some of the LCD sector’s headwinds.
Industry observers note that Sharp’s recent profit rebound—¥67.5 billion net profit despite a 14.5% revenue dip—stems from aggressive cost cuts and a tighter focus on core product lines. Yet the company still faces fierce competition from Chinese manufacturers and mass‑market brands. The Kameyama closure underscores the pressure on legacy LCD producers to either innovate or exit, while Foxconn’s AI server ambitions highlight the broader shift in Asian electronics manufacturing toward data‑center and AI infrastructure, a market expected to outpace traditional display growth in the coming decade.
Sharp's plan to sell Japan LCD plant to parent Foxconn falls through
Japanese electronics firm Sharp Corp said Tuesday that a plan to sell one of its liquid crystal display panel plants in central Japan to its Taiwanese parent, Foxconn, has fallen through, and more than 1,100 job cuts are expected at the plant.
The company said the Kameyama No. 2 plant in Mie Prefecture is set to halt production around August and that it will seek to cut 1,170 jobs through early retirement.
Restructuring costs are estimated at 14.9 billion yen ($96 million), including payments associated with the early retirement program, Sharp said. Of that amount, 12.9 billion yen will be booked as an extraordinary loss in the fiscal year ending March 2026.
The facility, along with the No. 1 plant at the site, once produced LCD TVs known as the “Kameyama Model,” which helped boost Sharp's presence in the large‑screen TV market. It began operations in 2004.
At an online press conference, President Masahiro Okitsu said that negotiations over the sale of the No. 2 plant broke down as its parent company, formally known as Hon Hai Precision Industry Co, concluded the deal would not be advantageous after factoring in future price trends for LCD panels.
The Taiwanese company is instead considering producing servers for artificial‑intelligence applications in adjacent buildings.
Sharp, which announced its intention to sell the No. 2 plant in May last year, also plans to close a subsidiary plant in Yonago, Tottori Prefecture, in July.
Sharp said Tuesday it posted a net profit of 67.52 billion yen in the April‑December period, returning to the black from a net loss of 3.6 billion yen in the same period a year earlier. Revenue fell 14.5 percent to 1.42 trillion yen.
While sales of appliances such as refrigerators and air conditioners declined, cost reductions in the LCD panel business and other areas contributed to improved earnings.
“The key issue is how we compete with Chinese manufacturers and brands from mass retailers,” Okitsu said.
0
Comments
Want to join the conversation?
Loading comments...