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.
© KYODO
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