Masahiro Okitsu, President of Sharp, a subsidiary of Foxconn, announced in a joint interview with Japanese media that the Sakai Display Product (SDP) plant, which produces large-size LCD panels for TVs, will cease production earlier than planned. Initially scheduled for the end of September, the shutdown is now expected to occur in late August.

According to a report by Asahi Shimbun on July 16, Sharp President Masahiro Okitsu announced in a joint media interview that the SDP, which produces LCD panels for TVs, is expected to completely cease production after the Obon festival (late August). This interview marks Okitsu’s first media appearance since taking office as Sharp’s president on June 27.

Okitsu mentioned that around July 20, SDP will start put glass substrates into production, with the final batch of LCD panels produced a month later.

Sharp’s SDP land and plant will be transformed into an AI data center, and a collaboration with Softbank and KDDI has been announced. However, Masahiro Okitsu did not elaborate on this cooperation framework during the media interview on July 16th.

Regarding Foxconn Chairman Young Liu’s appointment as Chairman of Sharp, Okitsu stated that this makes the division of duties clearer. Foxconn will oversee and support Sharp, while the existing brand business operations will be managed by Sharp.

Okitsu also pointed out the goal of increasing the operating profit margin of the “brand business,” which includes products like white goods, to 7% by the 2027 fiscal year (compared to less than 5% in the 2023 fiscal year). He emphasized that achieving a return to profitability in the 2024 fiscal year is imperative.

Reportedly, with Foxconn’s technical assistance, Sharp also plans to enter the AI and electric vehicle (EV) businesses, with plans to launch in the 2026-2027 fiscal years.

On May 14, Sharp announced its financial report, indicating that due to impairment losses in its panel business, the net loss for the 2023 fiscal year (April 2023 – March 2024) reached JPY 149.9 billion, marking the second consecutive year with a net loss exceeding 100 billion yen. However, Sharp forecasts that for the 2024 fiscal year (April 2024 – March 2025), its consolidated operating profit will be JPY 10 billion, with a consolidated net profit estimated at JPY 5 billion.

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• [News] Foxconn Ventures into Advanced Packaging, Sharp to Follow with Production Capacity in 2026
• Sharp Announces Closure of Sakai Gen 10 Line, Supply Cut of 5 Million TV Panels Expected in 2025, Says TrendForce

(Photo credit: Sharp)

According to a report from Economic Daily News, Foxconn Group is advancing into the field of advanced packaging with a strategic alliance between Taiwan and Japan, focusing on the trending panel-level fan-out packaging (FOPLP). Following Innolux’s related developments in Taiwan, another of Foxconn’s invested companies, Sharp, has announced its entry into panel-level fan-out packaging in Japan, with production capacity expected in 2026.

Foxconn Group already possesses a comprehensive capability in the AI sector, and with the key advanced packaging technology now in place, they are fully mobilized. On the other hand, Sharp is undergoing a major transformation, which also benefits Foxconn— as its subsidiary Foxconn Technology is a major shareholder in Sharp, and Pan International is a partner with Sharp, both of which stand to gain from this transformation and provide support for it.

Pan International has previously collaborated with Sharp in areas such as wire harnesses, PCBs, and optical components, and has also acted as a distributor for Sharp’s panels and optoelectronic components. With Foxconn Chairman Young Liu concurrently serving as Sharp’s chairman, along with Sharp scaling down its panel business and expanding its semiconductor operations, there is significant interest in whether there will be new collaborations between the two companies.

Earlier, Sharp announced that it is partnering with Japanese electronic component manufacturer Aoi Electronics to advance into the field of advanced packaging. Reportedly, an agreement has been signed between Aoi, Sharp, and Sharp Display Technology, under which Aoi will utilize Sharp’s panel facilities to build a semiconductor back-end process production line. In 2024, Aoi will establish an advanced semiconductor panel packaging production line at Sharp’s Mie Plant, aiming for full-scale production by 2026 with a monthly capacity of 20,000 wafers.

Nikkei previously reported that Sharp continues to downsize its panel plants while expanding semiconductor production. Sharp noted that the advanced packaging production line will be used to produce Aoi’s FOLP. According to the agreement, the three companies are considering cooperation in the semiconductor back-end process to expedite the establishment of production lines and achieve full-scale production.

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• [News] Foxconn’s Young Liu Newly Elected as Sharp’s Chairman to Assist Transformation
• Sharp Announces Closure of Sakai Gen 10 Line, Supply Cut of 5 Million TV Panels Expected in 2025, Says TrendForce

(Photo credit: Foxconn)

Foxconn Chairman Young Liu has been elected as Sharp’s chairman at Sharp’s shareholders’ meeting on 27^th, according to a report from the Economic Daily News, citing an announcement by the Tokyo Stock Exchange. The report also noted that Liu will leverage the strength of the Foxconn Group to fully assist Sharp in its transformation.

According to the report, Liu has previously shared the role Foxconn plays in Sharp’s operation, stating that Foxconn is currently assisting and advising Sharp’s management team from the perspective of a major shareholder.

Ahead of its shareholders’ meeting, the Japanese electronics maker has already restructured its management with a new CEO appointed. On June 26^th, the company announced that Executive Vice President Masahiro Okitsu will succeed Wu Po-Hsuan as president and CEO.

According to a report by Technews, after Liu assumes the position of Chairman at Sharp, he will accelerate Sharp’s transformation, deepening the company’s “collaboration for medium- to long-term growth,” while establishing a trustworthy Japanese Sharp brand.

In addition to inviting Liu to serve as chairman, Sharp’s board of directors has also approved the plan for a new executive management structure, aiming to strengthen the governance system with six independent directors. Under the new scheme, Sharp hopes to advance in areas including asset rationalization and the creation of a positive cycle for branding and new businesses.

As converting LCD panel factories into semiconductor bases seems to emerge as one of the latest trends, Sharp plans to collaborate with Intel to utilize its LCD panel factory in Japan, according to a report by Nikkei. Earlier in mid-May, Sharp decided that Sakai Display Products (SDP), its 10th generation panel factory, which produces large-sized LCD panels for TVs, would cease production by the end of September. Instead, the company intends to seek collaboration with other companies and optimize its factories to improve profitability.

Sharp posted a consolidated net loss of 149.9 billion yen (USD 959 million) in fiscal 2023, which ended in March, remaining in the red for a second consecutive year.

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• [News] Intel Reportedly Utilizes Sharp’s LCD Panel Factory for Semiconductor Backend Process
• Sharp Announces Closure of Sakai Gen 10 Line, Supply Cut of 5 Million TV Panels Expected in 2025, Says TrendForce

(Photo credit: Sharp)

Converting LCD panel factories into semiconductor bases seems to emerge as one of the latest trends in the semiconductor industry. According to a report by Nikkei News, Intel plans to utilize Sharp’s LCD panel factory in Japan, and collaborate with Japanese companies to develop semiconductor production technology.

Intel will reportedly collaborate with 14 Japanese suppliers, including Omron, Resonac, and Murata Machinery, to develop “backend process” technologies responsible for semiconductor assembly. They plan to use Sharp’s LCD panel factory as a research and development site, as the target locations potentially being Sharp’s Kameyama plant or Mie plant.

For display manufacturers, their ability to effectively control contaminants in the manufacturing environment directly impacts the fluctuations in yield. LCD panels, like semiconductors, suffer from decreased yield if even minute dust or particles are introduced during the manufacturing process. Thus, LCD panel factories are equipped with clean rooms designed to minimize dust and particles, making them suitable for both production and semiconductor research and development.

The report also stated that in addition to Intel, Rapidus, which aims to mass-produce cutting-edge 2-nanometer chips, and Mitsubishi Electric will also utilize existing LCD factories for semiconductor research and development.

In mid-May, per another report by Nikkei, Sharp decided that Sakai Display Products (SDP), its 10th generation panel factory, which produces large-sized LCD panels for TVs, would cease production by the end of September. Additionally, production of medium and small-sized LCD panels would be reduced. Instead, the company intends to seek collaboration with other companies and optimize its factories to improve profitability.

According to the report, currently, Sharp produces medium and small-sized panels at its Kameyama, Mie, and Hakusan factories. Daily production at Kameyama’s second factory is expected to decrease from 2,000 panels to 1,500, while production at Mie’s third factory will drop from 2,280 panels to 1,100, a 52% reduction, while the OLED production line at the Tenjiku factory will be closed.

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• Sharp Announces Closure of Sakai Gen 10 Line, Supply Cut of 5 Million TV Panels Expected in 2025, Says TrendForce

(Photo credit: Intel)

According to TechNews’ report, due to ongoing technology infringement disputes and the uncertainty in the tense relations between China and the United States, Samsung Electronics is cutting ties with the leading Chinese display supplier BOE. They are restructuring their supply chain, and other panel manufacturers such as AU Optronics (AUO), Sharp, and LG Display (LGD) are expected to benefit.

According to the Korean media outlet BusinessKorea’s report, industry insiders from South Korea revealed on the 15th that BOE is no longer among Samsung’s top three suppliers for TV panels in Q3, and its market share is starting to decline.

BOE accounted for approximately 10% of Samsung’s TV panel procurement in the first half of the year, originally ranking third among major panel suppliers.。

From the Q3 financial report, it is evident that Samsung has removed BOE from the main supplier list for TV and display screen device panels in the Device Experience (DX) division. This marks the first time since Q4 2015. Analysts believe that Samsung aims to restructure its partner relationships, focusing on domestic enterprises.

Samsung Electronics is planning to sever its medium to long-term partnership with BOE, primarily due to a patent infringement lawsuit involving its subsidiary Samsung Display (SDC) and BOE.

Insiders have revealed that collaboration between Samsung and BOE in the mobile phone panel sector has already ended. As for TV panels, the relationship has become tense due to significant cost pressure on Samsung caused by the panel manufacturer aggressively raising TV panel prices.

South Korean industry insiders anticipate that Samsung will increase collaboration with other suppliers, including LGD, Sharp, and AUO. Industry experts suggest that for next year’s TV panel procurement allocation, Samsung intends to increase the proportion of panels sourced from Japanese, Taiwanese, and South Korean manufacturers.

However, considering the significant production capacity of Chinese panel manufacturers and their production advantages in certain sizes, Samsung does not plan to completely sever cooperation.

Currently, Chinese panel manufacturers maintain an absolute advantage in global production capacity and are working to mend customer relationships. Besides, AUO’s TV panel production capacity may not be able to fully meet customer demands.

Reportedly, in preparation for the supply chain restructuring, LGD plans to increase the utilization rate of its LCD plant in Guangzhou, China, raising shipments from 9 million units this year to 16 million units next year.

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(Photo credit: AUO)