SHARP
BusinessCompanies
TECHNOLOGY

Sharp forms joint venture with state-owned China Electronics Corp

The US$2.9b deal involves setting up an LCD plant and Japanese group licensing technology

PUBLISHED : Friday, 28 June, 2013, 12:00am
UPDATED : Friday, 28 June, 2013, 4:30am

Sharp, a leading suppler of displays to Apple, said yesterday it would form a US$2.9 billion alliance with the state-owned company China Electronics Corp, which included an agreement by the Japanese electronics giant to license its advanced power-saving IGZO screen technology.

The new venture will be 92 per cent owned by CEC, which supplies equipment to China's military. The venture will set up a liquid crystal display plant with the goal of mass-producing panel displays for televisions, notebook computers and tablets in 2015.

Licensing IGZO, or indium gallium zinc oxide, displays fits into a strategy by cash-strapped Sharp to leverage its technology to bolster its finances. The firm signed a pact with Qualcomm in December last year, selling the US company an equity stake for US$120 million and agreeing to develop new screens based on IGZO technology.

IGZO screens boast power consumption as low as a tenth of conventional LCDs, high resolutions and faster reaction speeds.

While a deal to license the technology to a Chinese military-linked firm may raise eyebrows, Sharp does not exclusively own the technology, only being the first to commercialise it.

The agreement, which is a revised version of one agreed to with CEC in 2009, may instead represent a retreat by the Chinese firm to win access to Sharp's more advanced 10th-generation LCD manufacturing techniques. CEC is planning to build an "8.5th-generation" facility.

Sharp is the only panel maker in the world to have built a 10th-generation factory able to fabricate liquid crystal sandwiched in glass sheets thinner than a credit card that are 3.13 metres long by 2.88 metres wide. Smaller, 8.5th-generation sheets measure 2.2 metres by 2.5 metres.

In November, CEC blamed deteriorating ties between Japan and China over their territorial dispute in the East China Sea for shelving co-operation with Sharp to build a 10th-generation facility.

Sharp says no such agreement ever existed.

Yesterday's deal, including the construction of the 8.5th-generation factory in Nanjing, represents one of the highest-profile transactions between a Chinese firm and a Japanese firm since tensions flared last year over the chain of islands.

A Sharp spokesman declined to say how much in royalties the firm expected to receive.

Share

Send to a friend

To forward this article using your default email client (e.g. Outlook), click here.

Enter multiple addresses separated by commas(,)

CAPTCHA
This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.
Image CAPTCHA
Enter the characters shown in the image.

Related topics