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Dec. 27 (NBD) – Japan's electronic product manufacturer Sharp Corporation Wednesday was reported to split off its semiconductor business. 

The company later made an announcement to verify the information, claiming the businesses to be separated from the company are the electronic equipment division with semiconductor business included and the laser division. The spin-off will take effect on April 1, 2019.

The Japanese multinational corporation plans to establish two wholly-owned subsidiaries in January next year, with one named Sharp Fukuyama Semiconductor (SFS) specializing in semiconductors and equipment and modules for the application of semiconductors and the other named Sharp Fukuyama Laser (SFL) responsible for the development of lasers and equipment and modules for the application of lasers. 

To improve Sharp's expertise in high-end product development is of urgent need, so the company plans to disintegrate its businesses to enhance the flexibility in business operations.

Tai Jeng-wu, chairman and chief executive officer of Sharp, said in an interview with Japan's news media outlet Nihon Keizai Shimbun (Nikkei) that the company aims at creating more opportunities to cooperate with its parent company Hon Hai Precision Industry Co Ltd, which is better known as Foxconn Technology Group, and other companies from home and abroad for growth by setting up independent spin-offs.

According to Sharp, the transformation is also made to partner with Foxconn for ultra high-definition 8K televisions and Internet of things business and setting up wholly-owned subsidiaries is conducive to building a more independent business network.

On December 21 this year, Sharp and Foxconn were reported to collaborate with the local government of Zhuhai, Guangdong Province to build a joint venture for a chip-making project, according to a report from Nikkei.

With regard to the report, Tai Jeng-wu declared Sharp is totally unaware of it and declined to give further comment.

An insider familiar with Foxconn told Chinese news media outlet the 21st Century Business Herald that the plan is still under negotiations and remains unsettled.

Foxconn has early showed its ambition in building a plant in Zhuhai. In August this year, the Taiwanese firm has entered into a cooperation agreement with the Zhuhai municipal government in the design of semiconductor, semiconductor equipment and chips so as to promote the city to be an important base for the development of the semiconductor industry.

As Foxconn is ramping up efforts in the chip sector, it still faces a lot of problems related to the design, production and demand of chips. To partner with Sharp's subsidiary may be one of the solutions.

Email: wenqiao@nbd.com.cn