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Japan’s Sharp Corporation, under the guiding hand of its Taiwan-based parent company Foxconn Technology Group, continues to expand. The latest: The company just closed its previously announced deal to form a joint venture with display maker NEC Corporation. Under the terms of the deal, Sharp acquired 66% of the shares of NEC Display Solutions Ltd., a subsidiary of NEC Corp. NEC Corp. retains one-third ownership of the joint venture, but control of the joint venture—named Sharp NEC Display Solutions Ltd. (SNDS)—now rests firmly with Sharp Corp.
The (former) NEC product line will be rationalized with Sharp’s own business display line, and the joint venture should enjoy a wide range of synergies—not the least of which being Foxconn’s enormous parts-purchasing might and product-manufacturing capacity. Fujikazu Nakayama, Senior Executive Managing Officer and Business Solutions BU President of Sharp, will serve as Chairman of the new business. Hisatsugu Nakatani, President of NEC Display Solutions, will serve as President of SNDS. The new entity will have 950+ employees globally.
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| The combined Sharp-NEC display entities should prove to be a powerhouse in office and commercial displays |
The intent to combine strengths was initially announced in March 2020, and lays down the commitment by the two Japanese technology giants to the visual solutions business—competing against LG, Samsung, and BOE (among others). Display technology was reportedly the driving force back in 2016 for Foxconn to acquire majority ownership of Sharp. (If you are a client of KPI’s Advisory Services and you would like to read more about that, .)
What might come as a surprise to some, however, is the consultancy-led sales approach that—according to Sharp—NEC Display Solutions has built up over time and was of great attraction in the merger process. To be recognized as a trusted advisor to global customers is the ultimate aim for manufacturers who provide electronic goods for integration into a wider system. According to NEC Display Solutions, they are a leader in the integration of IT and network technologies. They have great strength in the digital signage and pro-AV markets, which will complement Sharp’s offering that has largely been towards collaboration tools for the general office until now.
The benefits of the joint venture should also trickle to Sharp Imaging and Information Company of America, the division of US-based Sharp Electronics Corporation (SEC) subsidiary that markets Sharp's business products: MFP and related office solutions, professional and commercial displays, and Skywell atmospheric water generators. The expanded market share and technology leadership in business displays will help SEC and its reseller partners continue to diversify away from the shrinking print market and into the growing (well, growing before the pandemic) market for office conferencing and collaboration systems and displays for public spaces and events.
There is no doubt that Sharp and NEC Display Solutions have great technological expertise. The strength of the new brand will lie in the IT solutions strength at a regional go-to-market level. If real synergies are realized there, the organizations work together as one, and the channels do not conflict or cannibalize the other, this could propel SNDS into a new leading position.
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