Foxconn parent invests US$806 million in Japan Sharp

TOKYO – Hon Hai Precision Industry, the parent company of Foxconn Electronics and one of the world’s largest electronics manufacturers, will acquire a stake of almost 10 percent in Japanese consumer electronics maker Sharp, and almost half of its LCD panel subsidiary Sharp Display Products, in a deal announced Tuesday.

Hon Hai will invest ¥66.9 billion (US$806 million) in the deal, providing it with access to Sharp’s manufacturing prowess in large LCD panels, where it is among the world’s leaders. Hon Hai will also take a major share and jointly operate one of Sharp’s key LCD factories in Sakai, central Japan, giving it access to up to half the panels produced there.

Sharp banked heavily on manufacturing such panels, best suited for large-screen TVs, but has lagged in producing screens for the booming smartphone and tablet market. Along with other Japanese electronics manufactures such as Sony and Panasonic, the company is facing heavy losses and struggling to turn its business around. Sharp said in February it expects to lose ¥290 billion in the current fiscal year, which ends this month, and recently announced a major leadership shakeup.

Sharp said timely action is necessary to tackle rapid price declines and increasing competition in the digital technology market.

With the added display demand from Hon Hai, Sharp will be able to ramp up production and lower per-unit costs at its facilities, which media reports say it had greatly reduced in recent months as demand faltered.

Sharp said it plans to use Hon Hai’s investment to strengthen its production facilities for producing mobile LCD screens and developing new LCD technologies.

The deal is the latest sign of Japan’s fading dominance in the global home electronics industry. The prices and profit margins its manufacturing prowess once commanded have been driven down by the rise of large manufacturers that build products for other brands: Foxconn’s clients include Apple, Hewlett-Packard, Sony and Nintendo.

Would you recommend this article?

Share

Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.


Jim Love, Chief Content Officer, IT World Canada

Featured Download

Featured Articles

Cybersecurity in 2024: Priorities and challenges for Canadian organizations 

By Derek Manky As predictions for 2024 point to the continued expansion...

Survey shows generative AI is a top priority for Canadian corporate leaders.

Leaders are devoting significant budget to generative AI for 2024 Canadian corporate...

Related Tech News

Tech Jobs

Our experienced team of journalists and bloggers bring you engaging in-depth interviews, videos and content targeted to IT professionals and line-of-business executives.

Tech Companies Hiring Right Now