Sharp Electronics has been having financial troubles for a while now, finding it hard to turn a profit. The company is about to report its third net loss over the last four years. It appears the route to take here is externalize the company’s LCD business.
Two of the banks that support the firm are requesting that this move is made, in order for Sharp not to lose money anymore. This means spinning off the tablet and phone LCD division. The Nikkei business daily claims that the division will be separated from the firm till March next year. Innovation Network Corporation of Japan, a state backed enterprise is ready to fund the new firm, contributing around $840 million to it.
In spite of the new Sharp LCD business being independent from the big Sharp, the company will keep major ownership in it. This is not a final route to take, as there are proposals to join Japan Display and merge with them. Sharp doesn’t want that, but it may be forced to, as the Chinese competition is coming hard.