“Sharp Corp.’s decision to seek a lifeline from Taiwan’s Hon Hai Precision Industry Co. underscores how far Japan’s once-dominant electronics industry has fallen,” Juro Osawa and Daisuke Wakabayashi report for The Wall Street Journal.
“Hon Hai builds gadgets for some of the world’s largest companies, including Apple Inc and even Japanese firms such as Sony Corp. and Nintendo Co.,” Osawa and Wakabayashi report. “On Tuesday Sharp said it sold a 10% stake to Hon Hai and its affiliate companies, collectively known as Foxconn, in exchange for about $800 million in cash to help shore up its core business of liquid-crystal display panels for televisions—an operation largely responsible for the multibillion-dollar losses Sharp expects to post this fiscal year.”
Osawa and Wakabayashi report, “Hon Hai in turn will become Sharp’s largest shareholder and gain technical expertise and manufacturing technology to build LCD panels. The company is growing at breakneck speed, generating revenue of $117 billion last fiscal year that dwarfs Sharp’s sales despite being more than 60 years younger.”
Osawa and Wakabayashi report, “The tie-up could strengthen the hands of both players in dealings with Apple—for which both are suppliers—in competition with industry leader Samsung. Hon Hai’s struggling LCD unit, Chi Mei Innolux, is saddled with losses and technological weakness. Gene Munster, a research analyst with Piper Jaffray, says the move is likely to frustrate Apple because it strengthens Sharp, which could become a potential competitor. Apple has been developing a television, according to people familiar with the matter, but its ultimate plans aren’t clear. Still, any future TVs would be such a small part of Apple’s business that ‘Apple is probably willing to look the other way,’ Mr. Munster said. He added that the move could help Apple if it uses components from Sharp for any future television.”
Read more in the full article here.
[Thanks to MacDailyNews Readers “Judge Bork” and “GetMeOnTop’ for the heads up.]
Sharp, LG Display begin iPad Retina display shipments – March 23, 2012
Samsung to supply Apple with iPad screen after LG, Sharp miss requirements, says analyst – March 13, 2012
Wow, Sharp sure is ramping up IGZO display production for some reason – March 2, 2012