Sharp Electronics, after quite some time of continually falling profits is looking towards a shakeup of their business model. With quarterly earnings about to be released, Sharp is expected to report another net loss. Reports are trickling in that two of Sharp's banks are actually attempting to force the sale of their businesses which are responsible for the losses. While details could still change, it is reported that the manufacturer is eyeing their division which is responsible for supplying LCD panels to smartphones and tablets. If the sell off of the LCD panel supplying division goes through as planned, it is expected to take place sometime in March of next year. Reportedly the Innovation Network Corporation of Japan (INCJ) is in talks to invest in the separated company with $840 million of government backed funding.
A move such as this is a big move, and definitely has the potential to bring about big changes to Sharp. With the future in mind, Sharp is reported to still have wishes to remain in control of majority ownership of the new company. Most likely the reason that Sharp wishes to maintain majority ownership in the LCD Panel division is due to the fact that its sales account for approximately one third of Sharp's net sales. The reason the division is hurting so badly and showing less than optimal earnings reports can be attributed primarily to a company called Japan Display. Japan Display, as well as vendors on the Chinese market have been undercutting Sharp's prices on LCD panels taking a huge bite out of their margins.
Some business specialists are recommending that Sharp should join its LCD panel supplying division with Japan Display. While a drastic move such as this could potentially allow Sharp to influence market pricing as well as increasing its size, Sharp does not appear to be considering any deal of this kind. Lastly, Sharp has also been reported asking company Japan Industrial Solutions to invest in their LCD panels division as well with as much as $253 million. Although Sharp selling its LCD panels division is potentially the most logical move, Sharp is also looking to Japan Industrial Solutions for a possible rescue package from its two major banks.