TOKYO: Shares in Japan's Sharp Corp jumped on Friday after an industry source told Reuters it is negotiating liquid-crystal display panel supply deals with Samsung Electronics of South Korea and Taiwan's Chimei Innolux.
Sharp expects to reach an agreement soon to supply Samsung with large panels, said the source, who declined to be identified because the deal is not public.
Sharp, the world's fifth-largest producer of large LCD panels, is also negotiating to provide Chimei with large panels for TV use in return for a supply of mid-sized panels from the Taiwanese firm, the source said.
Shares in Sharp touched a high of 888 yen, up nearly 5 percent, following the news. Markets in Taiwan and South Korea were closed for the Lunar New Year holiday.
The Nikkei business daily said earlier that Sharp and Chimei, a unit of Taiwan's Hon Hai Precision Industry, had formed a supply tie-up that would help Sharp cope with the effects of the strong yen, which is squeezing Japanese exporters' profits. Hon Hai is part of China's Foxconn Electronics group.
Sharp, which announced on Thursday it had almost tripled profits in the nine months to December from the same period a year earlier, aims to raise operation rates at its state-of-the-art panel factory in Sakai, western Japan.
"This is positive. It would be a very good way of tackling their problems," said Takao Hattori of research firm T.I.W. "The reality is that sales of their own televisions are rising, but not as much as they'd hoped, so this is an appropriate strategy."
Media reports have said Sony Corp, which has suffered six years of losses in its TV business, is reducing its procurement from Sharp in favour of cheaper manufacturers in other parts of Asia.
Sharp said it would not comment on individual deals. Chimei and Samsung could not immediately be contacted for comment due to the holiday.
Sharp has also reached an agreement to licence Chimei technology for improving the energy efficiency of LCD panels, the source said.
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