Hon Hai asks for joint ownership of Sharp's small LCD-media

TOKYO, Oct 6 (Reuters) - Taiwan's Hon Hai Precision IndustryCo is asking Sharp Corp to turn the Japanesecompany's small and mid-sized liquid crystal display panelbusiness into a joint venture between the two, Yomiuri newspaperreported on Saturday.

Sharp is also in separate talks to raise money by issuingconvertible bonds to Intel Corp and aims to reach anagreement by the end of the month, the paper said.

Hon Hai, headed by Chairman Terry Gou, has been expected toplay a critical role in the revival of the struggling JapaneseTV maker with business and financial assistance, bu t ta lksbetween the companies for a much-needed cash infusion havestalled for weeks.

Hon Hai's demand for Sharp to spin off and sell part of itssmall- and mid-sized LCD business is likely to further muddy thewaters as the Japanese firm is hesitant to cede part of its corebusiness seen as a key to its revival, the newspaper said,without citing sources.

Sharp officials were not immediately available for commenton the Yomiuri report.

Gou has bought a 46.5 percent stake in Sharp's Sakai plant,which produces large-sized LCD panels. Unlike commoditised TVdisplays, Sharp hopes it can still claim an advantage in smallLCD panels, which are used for smart phones and tablets.

Reuters recently reported Sharp is in talks to supply liquidcrystal display panels for ultra-thin laptops that typically useprocessors made by Intel, with sources hinting at thepossibility of future capital infusion by the U.S. chipmaker.

Hit hard by rapid decline in TV sales due to fiercecompetition from rivals like Samsung Electronics ,Sharp is attempting a turnaround, with backup from main lendersMizuho Financial Group and Mitsubishi UFJ FinancialGroup .

Uncertainty over Sharp's revival efforts grew after itsshare prices plunged earlier this year, prompting Hon Hai toseek a revision of the terms of a March agreement for it to buya 10 percent stake in Sharp for 67 billion yen ($851 million).

($1 = 78.6950 Japanese yen)

(Reporting by Taiga Uranaka; Editing by Sanjeev Miglani)


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Keywords: SHARP HON HAI/