Sharp reorganizes and lays off employees, rumored to close Miyuan LED factory

According to Japan's Kyodo News Agency on April 16, the media learned the full contents of Sharp's business restructuring plan on the 16th, including the closure of the Tochigi factory (Yaita City, Tochigi Prefecture) that produces LCD TVs, the sale of the head office in Osaka, and other large-scale layoffs. Sharp submitted the plan to major trading banks. As it is expected to suffer a loss of 200 billion yen (approximately RMB 10.4 billion) in fiscal year 2014 (April 2014 to March 2015), Sharp will seek the assistance of banks and others to increase capital by 225 billion yen to speed up restructuring.

The plan proposes to spin off the main LCD business and establish a subsidiary. It will also lay off about 3,000 people at home and 2,000 people at home and abroad.

Regarding the underperforming solar cell business, Sharp is considering a full exit, including household batteries, and will study the first sale of its "thin-film solar cell" division for large-scale photovoltaic power plants.

Domestic production of LCD TVs will be transferred to the Yao Factory (Yao City, Osaka Prefecture) that manufactures white goods. Due to the depreciation of the yen, the company considered moving production back to Tochigi Factory from overseas, but changed its policy when performance deteriorated beyond expectations. The treatment and whereabouts of employees will be decided in the future.

The plan also includes the closure of a total of four factories, the first to third factories of the Mihara Factory (Mihara City, Hiroshima Prefecture) that produces LEDs, and the Fukuyama Factory (Fukuyama City, Hiroshima Prefecture) that manufactures sensors. The company will compile a new mid-term business plan based on this plan and release it in May.

Due to the sluggish performance of the small LCD screen business for Chinese smartphones and the increase in structural reform costs, Sharp expects to turn into a loss again in fiscal 2014 for the first time in a year. The company has sought financial support from Mizuho Bank and Bank of Tokyo-Mitsubishi UFJ.