Sharp Corp has sold part of its liquid crystal display panel factory site in western Japan to telecom giant KDDI Corp for 10 billion yen as they jointly seek to build an artificial intelligence data center there.

The data center in Sakai, Osaka Prefecture, is expected to start operating in the current fiscal year through March 2026, equipped with U.S. semiconductor firm Nvidia Corp’s cutting-edge graphics processing units for AI development, KDDI said in a statement.

After announcing the halt of production of large LCD panels at the Sakai plant in May 2024, Sharp has reached separate deals with KDDI and SoftBank Corp, another mobile phone carrier, to utilize the plant site for two massive AI data centers.

The site acquired by KDDI was previously a factory that manufactured color filters.

Sharp and KDDI had initially agreed in June last year to start talks on building an AI data center with two other companies, Japanese system development firm Datasection Inc and U.S. tech firm Super Micro Computer Inc.

But Sharp and KDDI said in December that while discussions among the four companies had been terminated, the two of them had reached a basic agreement on building an AI data center.

SoftBank, meanwhile, said last month it had signed a deal with Sharp to acquire some of the land and buildings at the Sakai plant for about 100 billion yen. The company has said it aims to start operating its AI data center in 2026.

The Sharp Sakai plant, the only television LCD panel manufacturing factory in Japan, ceased production in August. The decision was made as the major Japanese electrical appliance manufacturer was struggling in LCD panel operation in the face of intensified competition with Chinese and other rivals.

© KYODO