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Backed by Foxconn, Sharp returns to PCs with Toshiba unit purchase

Japan-based electronics maker was away for eight years

Sharp will actively cultivate overseas demand for Toshiba PCs. 

OSAKA -- Sharp on Monday completed its purchase of Toshiba's personal computer business, looking to revive the operation by slashing costs via the extensive procurement network of Taiwanese parent Hon Hai Precision Industry, or Foxconn.

With this, Sharp re-enters the PC arena for the first time since discontinuing the Mebius brand in 2010.

The Japan-based manufacturer obtained 80.1% of Toshiba Client Solutions for about 4 billion yen ($35 million). Kiyofumi Kakudo stays on as president and CEO. Yoshihisa Ishida, a Sharp executive vice president, has been appointed chairman.

Sharp plans to rebuild Toshiba Client Solutions, which sustained an 8.3 billion yen operating loss in fiscal 2017, by cultivating markets abroad and taking advantage of Foxconn's procurement prowess.

As the world's largest electronics-manufacturing services company, Foxconn has many production sites across China and churns out such information technology equipment as servers for American tech companies.

Tai Jeng-wu, a Foxconn transplant who leads Sharp as chairman and CEO, said after the deal was announced in June that the business would turn profitable within a year or two, allowing Sharp to recover its investment. He said the operation should focus for that time on the Japanese market, where the Dynabook brand is strong.

But in late September, dealers at a briefing in Guangdong Province were informed that the PC lineup under Toshiba Client Solutions will expand rapidly in China.

Sharp aims to lift overall sales by 34% from fiscal 2017 levels to 3.25 trillion yen in fiscal 2019. But though Sharp's earnings have improved since its August 2016 purchase by Foxconn, the recovery faces difficulties ahead. Sales of liquid crystal display televisions in China -- which had driven revenue growth -- have slid.

Ishida, who led the latest deal, said Sharp will work with 400 engineers of the Toshiba business to create synergies in "internet of things" technologies.

Japanese electronics manufacturers have been forced out of PCs by intense price competition from Chinese players. The past several years have seen NEC and Fujitsu give up on running the operations on their own, switching to joint ventures with Lenovo Group. Sony has spun off its PC business, known for the Vaio brand, by selling it to an investment fund.

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