August 2, 2019 / 7:34 AM / 16 days ago

Apple supplier Sharp tumbles as trade gloom offsets Vietnam plant plans

FILE PHOTO: A logo of Sharp Corp is pictured at CEATEC (Combined Exhibition of Advanced Technologies) JAPAN 2016 at the Makuhari Messe in Chiba, Japan, October 3, 2016. REUTERS/Toru Hanai/File Photo

TOKYO (Reuters) - Shares of Apple supplier Sharp Corp tumbled 14% on Friday given concerns about an escalating China-U.S. trade war, even as the Japanese firm said a day earlier that it would build a plant in Vietnam to ease any impact on its business.

Sharp, which makes sensors, camera modules and screens for Apple Inc’s iPhones, said late on Thursday the new plant in Vietnam will make flat screens, electronic devices and air purifiers from the fiscal year starting in April next year.

The plant will allow it to shift part of its production from China if requested by customers, a Sharp executive said on Thursday after announcing a plan to set up a unit in Vietnam with $25 million capital to manage the factory.

But Sharp shares logged their biggest daily percentage drop since June 2016 on Friday, following U.S. President Donald Trump’s threat to impose further tariffs on Chinese imports from next month.

The additional tranche of U.S. tariffs could cause more pain for Sharp, which already suffered a bigger-than-expected 41% drop in quarterly profit as tit-for-tat import tariffs dampened sales of its smartphone components.

Sharp joins a growing number of global firms looking to reduce production in China and move to low-cost countries to diversify manufacturing sites amid the escalating trade dispute.

Its parent Foxconn is exploring the sale of its new $8.8 billion display panel factory in China, people familiar with the matter told Reuters.

Sony Corp announced a plan to close its Beijing smartphone plant, while Samsung Electronics Co is ceasing operations at one of its mobile phone plants in China.

Nintendo also plans to shift part of the production of its Switch gaming console to Vietnam from China.

Reporting by Makiko Yamazaki; Editing by Miyoung Kim and Himani Sarkar

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