Recently, Sharp, a subsidiary of Foxconn, has taken significant steps in transforming into an asset-light entity, actively laying out for future industrial development through the sale of various assets.

Sale of Headquarters Building and Old Factory

On December 26, 2024, Sharp announced the sale of its headquarters factory building in Sakai City, Osaka, to Sekisui Chemical Industrial Co., Ltd. for 25 billion yen. This move not only helps Sharp improve its financial condition but also promotes the company's transformation towards a business structure centered on brand operations. Concurrently, Sekisui Chemical plans to layout a flexible solar battery production line at the location of the sold headquarters factory building, with a target to start production before 2030, aiming for an annual production capacity equivalent to that of a nuclear power plant. The Japanese government will subsidize 50% of the project's funding to support its implementation.

Prior to this, on December 20, Sharp announced the sale of part of the land and facilities of the old TV liquid crystal panel factory in Sakai City to SoftBank Group for a transaction amount of 100 billion yen, with plans to use it for the construction of an artificial intelligence (AI) data center, further promoting Sharp's asset-light transformation.

Asset-Light Transformation

Sharp's series of asset sales reflect its determination in transforming into an asset-light entity. By divesting non-core assets, Sharp can concentrate resources on more promising business areas, such as brand operations and emerging technologies. After the reshuffling of the new management team at the end of June, Sharp clearly proposed a medium-term operational policy aimed at achieving asset-light operations, creating a virtuous cycle of brand operations and new industries.

Cooperative Layout of AI Data Centers

SoftBank Group plans to use the land and facilities of the old TV liquid crystal panel factory in Sakai City, purchased from Sharp, to build an AI data center. The center is expected to officially operate within the 2025 fiscal year, with an initial power capacity of about 150 megawatts, and plans to expand the power supply capacity to over 250 megawatts in the future. In addition, KDDI has also signed a cooperation agreement with Sharp to take over part of the land, buildings, and power supply equipment at the original site of the Sakai factory, also for the construction of an AI data center, expected to be fully operational by the end of March 2026.

Impact of Foxconn Group

Sharp's transformation has been supported by its major shareholder, Foxconn Group. Terry Gou, the chairman of Foxconn, also serves as the chairman of Sharp, emphasizing that the new management team will strengthen the company's asset management and continue to promote the implementation of the medium-term operational policy, including achieving asset-light operations and creating a virtuous cycle of brand operations and new industries.

Sharp's Operational and Financial Status

Sharp's financial report as of September 30, 2024, shows that its total assets amount to $10.843 billion, with total liabilities of $9.828 billion, resulting in an asset-liability ratio as high as 90.65%. Despite this, Sharp is striving to improve its financial condition through a series of asset sales and transformation measures, and promoting the company's transformation towards a business structure centered on brand operations.

In summary, Sharp has demonstrated its determination and actions in transforming into an asset-light entity and promoting the development of emerging industries by selling assets and actively laying out AI data centers and solar battery production lines. These measures not only help improve the company's financial condition but also lay a solid foundation for future sustainable development.

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