Sharp Corp. said Tuesday it will halt production of large liquid crystal display panels by the end of September at its plant in Osaka Prefecture, the only television LCD panel manufacturing factory in Japan.
The sole operator of LCD television panel factory in the country plans to transform the facility run by its wholly owned subsidiary Sakai Display Products Corp. into a data center, it said.
The decision comes as Sharp, a unit of Taiwan's Hon Hai Precision Industry Co., incurred a net loss for the second straight business year ended March due to its struggling LCD panel operation in the face of intensified competition with Chinese and other rivals.
The manufacturer of home electronics, office equipment and electronic devices booked a net loss of 149.98 billion yen ($958 million) on sales of 2.32 trillion yen, down 8.9 percent.
The company also announced its midterm business plans, aiming to streamline part of its electronic device business in addition to the LCD production and strengthen its home appliance and office equipment businesses by incorporating artificial intelligence technologies.
In Japan, Sharp also produces small- and medium-sized LCD panels for vehicles and tablets in Ishikawa and Mie prefectures. The company said it plans to scale down the LCD operation and sell off its semiconductor business.
Sharp CEO Wu Po-hsuan said in an online press conference his company plans to eventually sell off the remaining LCD business but Sharp later corrected his remark, saying it will actually sell its semiconductor business.
He added it is aiming to increase sales of LCDs for cars and virtual reality display products while offering incentives to encourage workers to retire early at some of its LCD plants, but it still expects the display panel business to incur a loss for this financial year ending next March.
The money-losing LCD subsidiary was a major contributor to the parent company's over 260 billion yen net loss in the previous business year to March 2023, causing Sharp to post a red number for the first time in six years.
Amid the difficulty, Sharp has unsuccessfully explored the sale of the subsidiary, leading the Japanese electronics company to halt production, sources with knowledge of the matter said.
For the current business year, Sharp expects to log a net profit of 5 billion yen.
