Foxconn Pulls Out of Sharp LCD Plant Deal, Potentially Disrupting Apple Panel Supply [Report]

Foxconn has pulled out of a deal to acquire Sharp's second liquid crystal display plant in Kameyama, Mie prefecture, according to Nikkei. Sharp confirmed Tuesday that the sale had fallen through after its Taiwanese parent withdrew, citing weak LCD panel prices.



The facility, known as the K2 plant, mainly produces small- and medium-sized panels for smartphones and tablets. It has also served as a key supplier of oxide LCD panels used in Apple's MacBook and iPad lineup, making it an important part of Sharp's role as one of Apple's IT display partners. With the sale off, Sharp plans to halt production at the site in August and seek voluntary retirement from 1,170 employees. The company expects to book 10 billion yen (about $64 million) in restructuring costs as extraordinary losses in the financial year ending in March, followed by an additional 2 billion yen the next year.


Foxconn, which serves as Apple's primary iPhone assembler, had initially planned to continue panel production at the plant while introducing new lines dedicated to artificial intelligence servers. While the acquisition is off, the Taiwanese giant is still weighing the site for its AI push. Foxconn is considering using a separate, currently idle building at the Kameyama complex to manufacture AI servers, a sector where it has recently secured orders for OpenAI's hardware.

According to TrendForce, Apple orders currently account for only around 16–17% utilization at the K2 facility. The research firm warns that if capacity is scaled back as planned, short-term supply of certain MacBook and iPad models could face disruption, particularly as Apple transitions more of its lineup to OLED panels.

Despite the collapsed deal, Sharp President and CEO Masahiro Okitsu said during an online earnings briefing that relations with Foxconn "have not deteriorated in any way."

Separately, Sharp scrapped plans to transfer large-panel LCD technology to an Indian company, which was intended to redeploy workers from its Sakai plant that ended production in August 2024. As a result, the company will seek voluntary retirement from an additional 240 employees and book a further extraordinary loss of 2.2 billion yen in the financial year ending in March. This comes as Foxconn continues to expand its footprint in the region, having recently helped drive record iPhone exports from India.