TOKYO, June 26 Sharp Corp is
considering licensing its power-saving IGZO liquid crystal
display technology to China Electronics Corp as part of a plan
to jointly produce panels in China, two sources familiar with
the plan said.
Sharp, which was rescued from failure by its banks in
October, is pursuing the partnership to expand low-cost LCD
production, the sources said on condition they not be
Sharp will receive several hundreds of millions of dollars
in fees for its advanced IGZO technology while investing in a
new CEC plant in Nanjing, they added. Sharp will have the right
to buy a portion of the plant's output.
The factory, which has yet to win approval from the Chinese
authorities, may start production as early as 2015.
The potential deal with CEC was first reported by Japan's
Nikkei business daily. The paper said CEC planned to invest 300
billion yen ($3 billion) in the plant, while Sharp would take a
less than 10 percent stake in a joint venture that will operate
IGZO, or indium gallium zinc oxide, screen technology
developed by Sharp allows for lower power consumption as well as
higher resolutions and faster reaction speeds, and is key to the
company's recovery plan after it suffered heavy losses due to
excess capacity and weak demand for its TV screens.
Sharp forged ties to CEC in 2009, when it agreed separately
to help it build a sixth-generation LCD plant and established a
joint venture in eighth-generation technology.
In November, CEC blamed worsening ties between Japan and
China over a territorial spat in the East China Sea for the
shelving of cooperation with Sharp to build an advanced
10th-generation display factory in China. Sharp, which operates
the world's only 10th-generation plant in Japan, said it had
never agreed to share its most advanced manufacturing
In March, Sharp agreed to sell a 3 percent stake to Samsung
Electronics Co Ltd for $103 million and a pledge to
supply small display screens to the Korean company.
Sharp in December also sought help from mobile chipmaker
Qualcomm Inc, agreeing to sell it an equity stake for
$120 million and a pact to develop new screens based on Sharp's
IGZO panel technology.