TOKYO: Shares in Japanese electronics maker Sharp soared more than eight percent Friday on reports it was boosting production of smartphone screens bound for China, after ending part of a troubled alliance with Taiwan's Hon Hai.
Investors cheered news that the display maker was going to ramp up output of its energy-efficient IGZO panels to go in smartphones produced by Chinese telecom giant ZTE.
The volatile stock soared 8.08 percent to 321 yen in the morning session at the Tokyo Stock Exchange, far outpacing the Nikkei index, which added a healthy 1.23 percent.
China's smartphone market is the world's largest after it overtook the United States last year.
It is crowded with major foreign brands such as Samsung Electronics and Apple as well as powerful homegrown players such as Lenovo.
Sharp's rise Friday came after the leading Nikkei business daily said it would use a Japanese plant that has been pumping out screens for Apple to also supply ZTE.
Separate reports Thursday said Sharp and Apple-supplier Hon Hai Precision agreed to end a plan to make and sell smartphones under the Sharp brand in China, which had been part of a wider tie-up announced last year.
The decision was based on concerns about the pair's prospects in the busy Chinese market.
Japanese brands also took a hit after a Tokyo-Beijing territorial dispute sparked riots in China last year and a boycott of Japanese goods.
In March last year, Hon Hai chairman Terry Gou agreed to invest in Sharp's most advanced Japanese LCD panel factory, which mainly makes large television panels.
At the time, Hon Hai had also planned to buy a 10 percent stake in Sharp, but that deal stalled after the Japanese firm's shares plunged and Hon Hai decided not to buy the stake.
Sharp has been undergoing a huge restructuring to pare losses largely tied to its ailing electronics business.
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