Struggling electronics maker Sharp has entered negotiations with Taiwan's Hon Hai Precision Industry for a tie-up over Sharp's display business, the Asahi newspaper reported on Saturday. Investors and analysts have urged Sharp to overhaul its liquid crystal display (LCD) and consumer electronics divisions.

Chief Executive Kozo Takahashi initially resisted but last month said he was open to major restructuring, including some kind of strategic deal for its LCD business.Sharp could consider accepting capital from the world's largest contract electronics manufacturer,

Hon Hai, in the display business after the business was spun off from Sharp, or selling Sharp's stake in their joint-venture TV panel plant in Sakai, Japan, the report said, citing unnamed sources.But Sharp was also seen as considering a Japan government-backed fund for support, and the situation was fluid, it added.

The long-struggling Sharp and Foxconn, the world's largest electronics contract manufacturer, have already forged an alliance. A factory operated by this alliance produces LCD panels for TVs at a factory in Sakai, Osaka Prefecture.