The transaction enables New Taipei City-headquartered Foxconn, listed on the Taiwan Stock Exchange as Hon Hai Precision Ind. Co. Ltd., and Osaka-based Sharp to form a strategic alliance and tap new market opportunities. Five years in the making, this deal marks the first takeover by a Taiwan firm of an established Japanese firm with a renowned global brand.
Terry Gou, founder and CEO of Foxconn, said he is “thrilled” by the prospects of the tie-up and looks forward to working with Sharp. “We have much that we want to achieve and I am confident that we will unlock Sharp’s true potential and together reach great heights.”
In response, Kozo Takahashi, president and CEO of Sharp, said he was pleased with the decision to form a strategic alliance. Bringing together Sharp and Foxconn allows the companies to accelerate innovation on the basis of their “creativity and entrepreneurial spirit,” he added.
Renowned for its production efficiency, Foxconn is a world-leading electronics manufacturing services outfit with production facilities in Brazil, Czech, Hungary, India, Japan, Malaysia, Mexico, Slovakia, Turkey and mainland China. It reported revenues of NT$4.48 trillion (US$138.28 billion) in 2015 and profits estimated at NT$143 billion. Sharp anticipates an operating loss of 170 billion yen on revenues of 2.45 trillion yen for the same fiscal year.
Under Gou’s plan, Sharp will maintain core interests in consumer electronics and liquid crystal display panels while developing green energy businesses. The majority of injected capital will go to expanding Sharp’s panel production capacities, including the organic light-emitting diode, or OLED, displays.
New display technology employing indium gallium zinc oxide, where Sharp is currently the global frontrunner, is another area of interest for Gou. It is expected this technology will assist panel-maker Innolux Corp.—another of the Taiwan tycoon’s companies—strengthen its position in the industry.
An industry analyst said the partnership is key in maintaining Taiwan panel sector’s advantages in the fiercely competitive international marketplace. “The synergies created from Foxconn’s manufacturing prowess, as well as Sharp’s advanced display technologies, will ensure Taiwan remains at the forefront of the global supply chain.”
According to Ministry of Economic Affairs statistics, display panels are one of Taiwan’s most important high-tech industries. Total output amounted to NT$953.33 billion last year, or 26.37 percent of the nation’s electronics and component sector. (SFC-JSM)
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