January 30, 2018 2:06 am JST

Sharp weighs bid for Toshiba's struggling PC business

Synergies with parent Foxconn would give Sharp a leg up in re-entering market

Nikkei staff writers

OSAKA -- Electronics maker Sharp is reportedly considering a bid to purchase Toshiba's money-losing personal computer business, aiming to get back into the PC market with help from Apple assembler and Taiwanese parent Foxconn.

Sharp and Toshiba have begun talks at the working level. Some see the price tag for Toshiba's PC operations, which include Dynabook laptops, reaching around 10 billion yen ($91.9 million).

Toshiba, which says it expects PC losses to deepen in fiscal 2017, has been considering jettisoning the business even while working to turn it around. Toshiba entered into talks last year on a sale to Taiwan's Asustek Computer, but a deal failed to materialize.

Sharp, whose PC offerings included the Mebius line of notebook computers, exited the business in 2010. But the Osaka-based electronics company appears to think that acquiring Toshiba's brand could aid in quickly rebuilding a presence.

Foxconn, formally Hon Hai Precision Industry, would be key to such an effort. It acquired Sharp in 2016. Information technology devices are Sharp's strongest area of synergy with Foxconn, Sharp President Tai Jeng-wu said in April.

Foxconn builds PCs for the likes of HP and Dell and has amassed the know-how and procurement networks needed to manufacture devices efficiently at high volumes. Sharp, meanwhile, is strong in small and midsize liquid crystal display panels for such gadgets as computers and smartphones. Making PCs in-house would guarantee it a customer for the panels.

Toshiba's computer lineup includes popular Dynabook laptops.

Toshiba's PC segment posted a 500 million yen operating loss for fiscal 2016 on sales of 191.8 billion yen. It faces stiff competition from rivals in China, Taiwan and elsewhere, as well as a market shrinking amid the spread of smartphones. The company's PC sales fell to about 1.8 million in fiscal 2016 from a peak of more than 17 million in fiscal 2011. Operations have been scaled back, including by pulling out of consumer PCs in emerging markets.

Toshiba appears to be keeping the door open to other potential buyers. 

Sharp targets group sales of 3.25 trillion yen in fiscal 2019, roughly 30% over the forecast for the year ending March 31.

Asia300

ASUSTek Computer, Inc.

Taiwan

Market(Ticker): TAI(2357)
Sector:
Industry:
Electronic Technology
Computer Processing Hardware
Market cap(USD): 6,964.80M
Shares: 742.76M
Asia300

Hon Hai Precision Industry Co., Ltd.

Taiwan

Market(Ticker): TAI(2317)
Sector:
Industry:
Electronic Technology
Computer Peripherals
Market cap(USD): 52,624.33M
Shares: 17,328.73M

Sharp Corp.

Japan

Market(Ticker): TKS(6753)
Sector:
Industry:
Consumer Durables
Electronics/Appliances
Market cap(USD): 20,567.27M
Shares: 613.28M

Toshiba Corp.

Japan

Market(Ticker): TKS(6502)
Sector:
Industry:
Consumer Durables
Electronics/Appliances
Market cap(USD): 18,787.44M
Shares: 6,520.70M

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