Foxconn Technology Group wants to shut down high-cost, underperforming overseas operations at Sharp Corp., after recently acquiring the cash-strapped Japanese display maker.
Foxconn founder and chairman Terry Gou made the announcement on Wednesday at the group's annual shareholders meeting.
"Sharp has lots of technology but it isn't able to market it," Gou said, as quoted by The Wall Street Journal. "Turning patents to technology, then turning technology to products, that's what we are good at."
According to Gou, all legal methods for Sharp's acquisition will be accomplished by the end of June. New management will be taking over the Japanese company on July 1.
In March, Foxconn finalized its deal to purchase the struggling display manufacturer at a discounted price of $3.5 billion. The deal was marked as a success for the Taiwanese group as it has been eyeing to venture big into the next-generation display market.
Inefficient and redundant operations, including joint ventures, will be closed down, according to Gou.
"Sharp has too many subsidiaries, which results in too much overhead," Gou said. He added that the shutdowns will start overseas to reduce "a lot of the operational cost" of improper ventures.
Gathering information from an insider, Reuters said that the restructuring could affect about 3,000 employees in Japan. The numbers could even rise when Sharp's overseas businesses are taken into account.
Meanwhile, Gou said that Sharp's home appliance segment could offer some potential. He announced that Foxconn will be working to extend its sales footprints to the U.S. Talks with a U.S. wholesaler are said to be on the table.
Additionally, the electronics contract manufacturer said that it is planning to re-establish Sharp's semiconductor business, where the Japanese maker used to hold several patents.
Sharp's management of finances will also be aligned to that of Foxconn's, with Gou reiterating that his group "[has] very conservative accounting principles."