Taiwan Apple supplier Hon Hai becomes Sharp’s largest shareholder with 10% stake

“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.]

Related articles:
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

6 Comments

  1. I wonder if this is Foxconn getting in on Sharp’s LCD sales to Apple now before the launch of the Apple TV. They’d love some of that business but cant win it themselves (likely just assembling the Apple TVs).

    1. Or it could just be that the phrase “Apple has been developing a television, according to people familiar with the matter,…” is simply Gene looking into a mirror and unknowingly asking himself if Apple is developing a TV as he is very familiar with a TV rumor.

  2. It would server those jackasses right at SamDung if Apple partners with Sharp and killed their TV business. That and move away from SamDung altogether. You don’t tug on super mans cape and you don’t mess around with Apple like Samdung has and get away with it. What I find really odd is that they are forcing Apple to buy their components elsewhere if Apple does finally make the move SamDung is in a lot of trouble. That loss of business will be hard to explain to investors. Oh yeah guys sorry for earnings being down 95% but we kind of stole technical info from Apple our largest customer and then we made products that looked just like theirs and then we sued them as well.. Cant understand why they left us as a client.

  3. So, if this move is likely to frustrate Apple, why don’t they buy 25-40% each of both FoxCon AND Sharp. Thats some strategic investing, no frustration required.

    Or, if an actual physical TV panel is in the works, throw some Cash to Panasonic, which owns or has license to the most awesome Pioneer KURO tech……

    Its not like Apple hasn’t purchased all the production capacity of many manufacturers before, and will do so again if it helps them get better pricing.

    1. With all of the FUD concerning employee conditions at Foxconn, it seems to me that Apple is being very sensible keeping assembly at arm’s length, and letting Foxconn — a completely separate organization — deal with the bad publicity. If Apple owned any part of them, it’d just give more ammo to the anti-business people here and around the world.

Leave a Reply to darknite Cancel reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.