Foxconn wants more Sharp shares, aims to beat Samsung displays on clearness

By , Jun 18, 2012

In another hint that Hon Hai Precision Industry, also known in the Western world as Foxconn, could be gearing up for mass production of a rumored Apple television set, Reuters now reports that Foxconn is in talks with the Japanese multinational corporation Sharp about increasing its stake.

This is interesting development as Foxconn in March bought an eleven percent stake in Sharp worth $844 million. The two companies now run Sharp’s cutting-edge display plant in Sakai, Osaka, leading some to speculate that Foxconn made the move on behalf of its biggest customer, Apple of California, which has long been rumored to be readying production of a full-blown television set, which Foxconn publicly denied

Reuters has the story:

Hon Hai Precision Industry , the main supplier of Apple Inc, is in talks with Sharp Corp about increasing its stake as it bets on the Japanese firm’s leading edge technology to give it a boost in the cut-throat display panel business.

Sharp’s shares extended gains to over 6 percent after Hon Hai chairman and founder Terry Gou told the company’s annual meeting in Taiwan on Monday that the talks come after a recent steep fall in Sharp’s share price.

The news gathering organization also asserted last month that Sharp will share its technological know-how with Foxconn’s new manufacturing facility in Chengdu that will produce display panels for Apple’s iPhone and other consumer electronics devices.

It’s also interesting that Foxconn CEO Terry Gou noted the Sharp deal will lead his company to beat Samsung on the display front.

I’m proud to say the cooperation with Sharp will let us beat Samsung in terms of clearness – high resolution.

As you’ll recall, Samsung is Apple’s key supplier of chips and mobile displays, including the high-resolution Retina panel for the new iPad.

Even more telling sign: the CEO paid for a 46.48 percent stake in Sharp’s Sakai plant out of his own pocket.

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.

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.

Surprisingly, he said that its capacity would soon be used up so he promised to invest more money to expand it.

It remains unclear who is ordering pricey Indium Gallium Zinc Oxide panels from Sharp’s cutting-edge Sakai plant.

Chinese-language China Business News quoted “informed sources”, claiming Apple had in May begun producing the first prototypes of its rumored HD TV set, with plans to ramp up production later this year.

Despite the rumor mongering, solid evidence regarding the iTV project has yet to surface.

Do you still think the full-blown Apple television set is in the cards?

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