Sharp president not concerned about technology drain with Hon Hai management

The president of embattled Japanese electronics giant Sharp Corp. told a news conference on Feb. 4 that his company has built "mutual trust" with Taiwan's Hon Hai Precision Industry Co., the reportedly preferred investor in takeover negotiations, suggesting that the issue of a technology drain should not be a problem.

Sharp President Kozo Takahashi hinted at the Feb. 4 news conference that the company's preferred bidder in takeover negotiations is the world's largest electronic manufacturer instead of a Japanese government-backed fund, while avoiding to comment on the details of its business reconstruction plans.

The news conference to announce earnings for fiscal 2015 held in Tokyo was broadcast live to Sharp headquarters in Osaka, while a total of over 200 reporters crowded the conference rooms. The reporters shot questions at Takahashi about whether the company was negotiating with the Taiwanese electronic manufacturer, known for the trade name Foxconn, as the preferred candidate in takeover talks over the state-funded Innovation Network Corporation of Japan (INCJ). While Takahashi denied that his company is placing higher priority on Hon Hai, he said, "We're negotiating (with different parties) at a different pace, and right now we're putting more people in negotiations with Hon Hai."

Hon Hai has proposed to invest 700 billion yen in the struggling manufacturer, while INCJ has offered 300 billion yen. Takahashi emphasized, however, that the amount of payment is not everything when choosing the company's investor and said he would place emphasis on future growth outlook and job security for Sharp employees.

When asked about concerns over possible outflows of technology such as Sharp's original power-saving IGZO liquid crystal products, Takahashi pointed out that Sharp and Hon Hai have jointly operated a liquid crystal panel factory since 2012 and there has never been a technology leak case reported.

"We promised not to do such things. We have built mutual trust," Takahashi said, emphasizing that the issue of technology outflows is not a concern even if Hon Hai was to acquire Sharp.

Meanwhile, Takahashi denied that he will be resigning right after the company strikes a deal with its investor.

Takahashi added, "I feel a grave responsibility (over the company's struggling business). At the same time, I am working on the survival of Sharp for the future and thinking about how the company can contribute to the world. I cannot give up easily."