Sharp gobbles NEC as Japan's display giants team up to take on Europe and North America

Japanese display giant Sharp will gobble NEC's display business in a push to expand into North America and Europe.

Under the terms of the deal, Sharp will acquire two-thirds of NEC Display Solutions (NDS) and form a joint venture to take the two companies' products to market.

NDS makes LCD displays, professional projectors, and digital cinema products and solutions. The company has a sales of 63.2 billion yen ($571m) but has struggled in recent years as margins for displays have shrunk amid growing competition.

Sharp makes sensors and camera modules, as well as some panels for Apple's iPhones. The Osaka-based firm was bought by Foxconn owner, Honn Hai, in 2016 for $3.8bn after years of heavy losses.

In a trading update, Sharp said it was acquiring NEC's display business due to its strength in the European and North American markets. Sharp reckons that the combined business will benefit from scale and cross-selling, which will help its 5G-capable 8K screens find more buyers.

"This joint venture between Sharp and NEC Display Solutions will bring even greater value and benefits to customers and partners by extending our state-of-the-art product portfolios together with a range of professional service offerings," said president of NDS, Hisatsugu Nakatani.

"Sharp and NEC Dispay Solutions follow the same strategic approach to the future of visual solutions, focusing on superior customer satisfaction enabled by high quality products, sales leadership excellence and committed relationship building.

"The combination of Sharp's and NDS's international strengths is mutually complementary," said Sharp's head business operations, Fujikazu Nakayama. "Sharp believes that developing NDS as a joint venture with NEC will contribute to our business growth by enforcing our B2B business and expanding sales."

The acquisition comes as Sharp tries to bolster its portfolio amid increased competition from Chinese and Korean rivals. Sharp was once a major supplier of screens for Apple's iPhone, but its output has dropped off since Cupertino made Samsung its primary supplier for its next-generation OLED displays. LG, Sharp, and Japan display continue to supply Apple as secondary suppliers.

Last month, Sharp reported a 38.5 per cent increase in its Q3 operating profits to 29.4 billion yen ($265m) thanks to gains in its appliance division and a restructure that cut about 7,000 jobs. ®