Sharp's New Venture: Can Electric Vehicles Save the Company?

Latest Update October 28, 2024

In search of “Sharp-ness,” Sharp’s unique approach to the EV market will be put to the test as the company moves away from its traditional LCD business and accelerates its efforts to turn a profit.

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Japan, September 10, 2024 - Sharp faces a mountain of challenges, including restructuring its LCD business and continuing to invest in new business. The company’s technology exhibition, Sharp tech-day “24” will open on the 17th. The aim is to use the opportunity to promote its technologies and products, including the electric vehicle (EV) business that the company plans to enter in the nest few years. in order to create business opportunities. However, the company’s flagship EV cannot be realized without the cooperation of its parent company, Hon Hai Precision Industry Co.,Ltd. of Taiwan, and it remains to be seen how much Sharp can demonstrate its individuality. The question is whether the company can regain its independence in this difficult environment.

“We want to create a world where we can enjoy the convenience of artificial intelligence (AI) in our daily lives” Sharp’s Chief Technology Officer, Mototaka Taneya was proud, at a pre-tech Day briefing. The company's explanatory materials prominently feature AI and EV technologies. At the exhibition, the company will introduce over 50 of the focus technologies.

The highlight of the show is the EV concept model “LDK+.” Aiming to expand the living space concept, it will create a comfortable in-car environment by linking with IoT (Internet of Things) home appliances and installing a large display. The aim is to create an EV that “creates value even when parked” (Taneya CTO).

Sharp lacks the in-house expertise to manufacture complete vehicles for a more concise and direct statement. For mass production, they have no choice but to rely on Foxconn. The EV platform will also be provided by Foxconn. CTO Taneya said that “at the very least, Sharp is planning and marketing” the concept model, but features such as displays and IoT technology that links with the vehicle are not new in the highly competitive EV market.

Will Sharp be able to demonstrate its superiority in EVs and AI? In addition, the company is currently facing the challenge of structural reform of existing business such as liquid crystal displays and semiconductors. Following two consecutive years of losses since the fiscal year ending March 2023, Sharp announced a structural reform of its “device business” which includes liquid crystal displays, in May 2024. Its Sakai plant, which produces large LCD panels for televisions, stopped production in August, and The company is exploring options to repurpose the land and building, such as converting it into a data center or a solar cell production facility.

Details of the collaboration with other companies have not been made clear, but renting space alone will not lead to future growth. The demand for small and medium-sized LCDs is also declining, and the company needs to quickly show a path to turning a profit.

Sharp Exits LCD Business, Halts Production of Large TVs

Sharp’s strength was its ability to bring unique products to market that its competitors could not produce through rapid development across the organization. One mid-level employee commented, “The company had the speed and passion of startup. That DNA is probably still there”

On the other hand, the company is currently lacking in products and businesses that can drive growth, and some shareholders are critical of the company, saying that it “doesn’t have a hit product.” As President Masahiro Okitsu recalls, “For about five years after we came under the umbrella of Foxconn, we were able to make almost no investment in new development,” as the company’s efforts to move away from the LCD business consumed it and it did not receive sufficient assistance from Foxconn.

Creating growth areas through brand business

To get back on track for growth, the company needs to create growth areas from its “brand business” such as home appliances, multifunction printers, etc. Technology exhibitions can be seen as the current answer to this problem.

With the strengths of EVs and AI unclear, the challenge for the company to create unique products will be whether it can regain its autonomy, including in investment decisions, while still enlisting Foxconn’s cooperation.