Sharp plans to halt production at one of its key LCD factories in Japan after a proposed sale to Foxconn collapsed. The decision affects the K2 plant in Kameyama, which produces oxide LCD panels used in some MacBook and iPad models. As production winds down in August, attention now shifts to how this move could affect Apple’s supply chain.
The factory had been set for sale to Foxconn, Sharp’s Taiwanese majority owner. However, Foxconn withdrew from the deal, citing weak LCD prices. Sharp will now shut down the plant and restructure operations as competition intensifies in the display market.
According to Nikkei Asia, Sharp confirmed during its earnings call that Foxconn backed away from the acquisition due to “weak LCD prices.” The company plans to halt production in August and seek voluntary retirement from 1,170 employees. Sharp expects to book 10 billion yen in restructuring costs this financial year, followed by another 2 billion yen next year.
Impact on Apple’s Supply Chain
If production stops at the K2 facility, the short-term supply of oxide LCD panels for certain MacBook and iPad models could face disruption. Taiwanese research firm TrendForce said that supply “could face disruption” if the plant ceases operations.
TrendForce also noted that Apple accounts for about 16 to 17 percent of the factory’s total utilization. That gives Apple roughly six months to adjust sourcing plans. Apple manages one of the most efficient supply chains in the industry, so any impact on shipping timelines will likely remain limited.
The K2 plant once held a strong position in oxide backplane technology. TrendForce explained, “The plant’s competitive edge once stemmed from its industry-leading oxide backplane technology, serving as a benchmark for Apple’s MacBook and iPad panels.” However, increasing investment from Korean and Chinese manufacturers has reduced Sharp’s advantage.
Shift Toward OLED Displays
At the same time, Apple continues to move its product lineup toward OLED technology. Recent iPhone models and the last two iPad Pro generations already use OLED panels. Over the next one to two years, iPad mini, iPad Air, MacBook Pro, MacBook Air, and iMac models are expected to follow.
Sharp also scrapped plans to transfer large-panel LCD technology to an Indian company. As a result, it will seek voluntary retirement from another 240 employees and record additional extraordinary losses.
While the shutdown creates short-term uncertainty, Apple’s transition to OLED reduces long-term reliance on oxide LCD production.
