“Terry Gou, founder of Hon Hai Precision Industry, will show off an advanced LCD panel factory he jointly owns with Sharp to a delegation of fellow Taiwanese on Thursday that has become a symbol of how he may save the Japanese firm from the wreck of Japan’s sinking TV industry,” Tim Kelly reports for Reuters. “Feeble demand that left the $4 billion plant operating well below capacity forced the maker of Aquos LCD TVs to post its worst ever annual loss last business year. But helped by recent orders won by Hon Hai, production at the plant in Sakai, western Japan, has surged, according to sources.”

“Gou, looking to further tap Sharp’s expertise to produce more panels for Apple Inc’s iPhones and consumer electronics, is on the cusp of sealing a deal that will make his company the biggest shareholder of century-old Sharp with at least a 9.9 percent stake,” Kelly reports. “But whether he makes the investment, Gou says, depends on the Japanese firm’s willingness to heed his advice on how to restore profits.”

“Hon Hai, which Gou started four decades ago as a plastic parts maker, is hoping to get the technological know-how of Japan’s leading panel maker to improve operating margins and boost its supply of panels to Apple. For Sharp, the Japanese firm needs backup from Hon Hai to remain viable in the long term, say investors,” Kelly reports. “Sharp and other Japanese TV makers Sony Corp and Panasonic Corp, which ruled the global TV market in the 1980s and 1990s, have been battered by aggressive South Korean rivals Samsung Electronics and LG Electronics.”

Kelly reports, “As the major shareholder in Sharp, which also builds screens for Apple’s iPhone and iPad, Hon Hai will be concerned about the performance of the Japanese firm’s other units, including its money-losing solar-panel business, profitable appliance division and printer unit. Sharp so far has said that to return to health, it will lay off 5,000 workers, its first redundancies in more than 60 years. It may have to cut more, analysts say, if pressure from Gou adds to a similar push from lenders to do more to turn itself around.”

Read more in the full article here.

Related articles:
Sharp jumps on rumored reorg plan; Hon Hai said seeking to double planned investment – August 17, 2012
Sharp says in talks with Foxconn over March investment – August 10, 2012
Options narrowing for Japan’s cash-strapped Sharp; may face future as Apple component maker – August 6, 2012
Hon Hai to renegotiate investment in Sharp after losses – August 3, 2012
RUMOR: Apple to launch upgraded 9.7-inch IGZO iPad this summer; displays to shift from Samsung to Sharp – June 29, 2012
Apple supplier Hon Hai in talks to buy more Sharp shares; Terry Gou says Sharp alliance will beat Samsung in HD – June 18, 2012
Sharp to supply technology to Hon Hai’s China plant for Apple iPhone display production – May 24, 2012
Sharp announces production of world’s first IGZO LCD Panels – April 13, 2012
After using Apple’s new iPad with Retina display, old iPad screens become absolutely unacceptable – March 30, 2012
Apple ‘iTV’ beckons as jackpot in Hon Hai’s Sharp gamble – March 28, 2012
Foxconn-Sharp partnership likely targeting Apple orders – March 28, 2012
Taiwan Apple supplier Hon Hai becomes Sharp’s largest shareholder with 10% stake – March 28, 2012
Apple to unveil smaller 7.85-inch iPad this year, says anonymous Samsung official – March 13, 2012
Wow, Sharp sure is ramping up IGZO display production for some reason – March 2, 2012