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Hon Hai/Foxconn plans deeper investments in Sharp

updated 12:10 pm EDT, Mon June 18, 2012

Could be used to pull orders for Apple TV set

Hon Hai -- better known as Foxconn -- is in talks to buy more shares from Sharp, according to company chairman Terry Gou. Reuters reports that Gou revealed the information at the company's annual meeting on Monday; he specifically noted that Hon Hai is taking advantage of a recent drop in Sharp's share price. "When we [first] bought [in March], Sharp's shares were 550 yen, now it is 400 something. It's been dragged by the macro environment. We have already sent delegates there to see if we can buy more shares," said Gou.

The March investment was valued at $844 million. As a part of it, Gou also took a 46.48 percent stake in Sharp's money-losing Sakai LCD plant with his own money. On Monday the chairman commented that the factory's capacity should soon be used up, and he expects to invest more capital for expansion. "I invested in the Sakai 10th generation plant in my own name because some investors were concerned about investing in panels, that it might not be a good business," he explained. "The Sakai plant has an exclusive agreement with Corning on large panel supply; so our competitors won't be able to secure any glass even if they want it."

Gou also noted that he hopes to list the factory on the Taiwanese stock exchange within three years, and claimed that the plant's technology is superior to that being used by Samsung. "I'm proud to say the cooperation with Sharp will let us beat Samsung in terms of clearness -- high resolution," he said.

A major incentive for Hon Hai's investment in Sharp is thought to be the upcoming Apple TV set. Hon Hai is already Apple's biggest supplier, but is better known for manufacturing computers and handhelds, and may need Sharp's expertise to attract Apple TV orders. The Sakai plant's deal with Corning could also be important, since Corning Gorilla Glass is already used on Apple devices like the iPhone.

by MacNN Staff



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