UPDATE 1-Sharp eyes LCD output in China with local partners

* Sharp considering LCD production in China

* Likely to beat its 2009/10 LCD TV sales target for China

* Shares close up 1.1 pct, roughly in line with market

TOKYO, June 5 (Reuters) - Japan's Sharp Corp (6753.T) said it was in talks with potential local partners in China to jointly make LCD panels there, taking aim at growing flat TV demand in the world's third-largest economy.

Such a move would mark a departure from Sharp's usual strategy of making core products at home.

"It is true that we are considering building a plant (to make LCDs) in China," Sharp President Mikio Katayama told reporters.

Details such as the timing of the plant's construction have not been fixed as talks are ongoing, Katayama said, without specifying which potential business partners Sharp is speaking to.

The company said in April that it would shift some production of key components such as panels and solar cells overseas to lessen the impact of foreign exchange fluctuations.

The firm plans to start production at its $3.9 billion LCD panel plant in Japan in October to meet recovering TV demand.

The factory, located in the western Japan city of Sakai, will be the world's first plant that handles so-called 10th-generation glass substrates, which are bigger than earlier-generation substrates and help reduce per-panel production costs.

Katayama also said on Friday that Sharp is likely to beat its target to sell 1.2 million LCD TVs in China in the year to March 2010. It sold 1.04 million LCD TVs in the country in the last business year.

Sharp is the world's fourth-largest LCD TV maker after Samsung Electronics Co Ltd (005930.KS), Sony Corp (6758.T) and LG Electronics Inc (066570.KS).

The maker of Aquos brand LCD TVs held a 9 percent share in the global market in January-March, according to research company DisplaySearch.

Prior to Katayama's comments, shares in Sharp closed up 1.1 percent at 1,097 yen, compared with a 1 percent gain in the Nikkei average .N225. (Reporting by Kiyoshi Takenaka and Mayumi Negishi; Editing by Joseph Radford)