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Sharp to build PC factory in China, near Foxconn plant

Electronics maker to tap group's procurement power to turn around the business

Flags of Sharp and parent Foxconn fly at the Japan-based company's plant Sakai, Japan. 

TOKYO -- Sharp plans to set up a manufacturing base for personal computers as early as next year in eastern China, aiming to slash costs by setting up shop near a production hub run by parent Hon Hai Precision Industry, or Foxconn.

The new facility in Shangdong Province will become Sharp's second PC production site in China. When it acquired the computer business from Toshiba in October, the Japanese electronics maker took over a factory in Hangzhou as well. Manufacturing will be handled by a subsidiary, capitalized at $66.6 million, it formed in August with a local partner.

By building a new factory in the city of Yantai, Sharp seeks to gain better access to Foxconn's highly efficient mass production technology and procurement network. The aim is to cut costs and quickly improve the money-losing PC business's bottom line.

Last month, Sharp spent about 4 billion yen ($35 million) to buy Toshiba Client Solutions, the operator of Toshiba's PC business. The subsidiary, which offers the flagship dynabook PC line, suffered a net loss of 8.2 billion yen last fiscal year. Sharp is committed to carrying out a reorganization in the second half of fiscal 2018 in an effort to bring the unit into the black, according to Chairman and CEO Tai Jeng-wu.

The PC unit aims to double its global computer sales from 1.5 million units in fiscal 2017 by acheving increases in Japan, China, Europe and the U.S.

Foxconn, the world's largest electronics contract manufacturer and known as the main assembler of Apple's iPhones, builds servers, video game consoles and the like in different parts of China.

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