Troubled Japanese LCD manufacturer Sharp is in talks to sell to Taiwanese company Foxconn. According to Foxconn chairman Terry Gou, the two companies have cleared 90 percent of the obstacles to sealing a final deal. If the deal does go through, it will mark significantly new openness of Japanese companies to foreign suitors. Also wooing Sharp is Innovation Network Corp. of Japan (INCJ), a Japanese government-supported consortium that has already acquired the display businesses of Toshiba, Hitachi and Sony.

According to The Wall Street Journal, Gou reported that Sharp signed an agreement giving Foxconn negotiating rights ahead of INCJ, but Sharp disagreed with Gou’s assessment. Sharp president Kozo Takahashi has said, however, that his company favors the Foxconn proposal, which remains valid until February 29. Foxconn is offering approximately $5.5 billion (659 billion yen), about twice the INCJ offer of about 300 billion yen.

Gou has also promised to keep Sharp largely intact, as well as its brand. “Sharp is very popular brand, and we, Foxconn, don’t have a brand,” Gou said. “We are investing a lot of money in Sharp, and we wouldn’t do it if we were not confident about Sharp and its turnaround.” Gou has also said he plans to invest money in Sharp’s facilities and support its engineers.

The New York Times reports that, for INCJ, Sharp is “the final piece of the puzzle the government needs to create a national champion,” by pumping up production volume to a level that will make it profitable. But, under INCJ, Sharp would likely be broken up, suggests Bloomberg.

Sharp has been battered by falling prices for liquid crystal display panels for smartphones. NYT reports that Sharp has lost about $10 billion over the last five years, with a net loss of 24 billion yen for the last quarter.

Foxconn has long worked on expanding beyond its electronics assembly business, notes NYT, buying cellular spectrum, taking part ownership in a telecommunications group, moving into robotics and electric cars, and creating a venture capital fund to seed smaller hardware makers. But, for Sharp, a completed deal would be “a deeper test for corporate Japan,” pitting “the sort of government-led industrial policy long favored by Japanese elites against the forces of a more open global market.”