Taiwanese electronics giant Foxconn Technology Group (富士康) has proposed taking over troubled Japanese behemoth Sharp’s display business, the Nikkei business daily reported yesterday, and has urged Apple Inc to join the deal.
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Foxconn – which is the trading name for Hon Hai Precision Industry – has also expressed its desire to purchase Sharp’s 38 percent stake in a major display factory that the two firms jointly operate in Sakai city in western Japan, the Nikkei said. Aside from the LCD operation, the Japanese maker has also announced its plans to sell the company’s headquarters and to withdraw from the television business in North America as well as to cut back its solar panel production. Foxconn’s proposal would limit Sharp’s risk while enabling it stay involved in the business. However, its chief executive Kozo Takahashi resisted investor pleas calling for a drastic overhaul or spin-off of the LCD business. If the negotiations would lead to a deal, is would see Foxconn take a majority stake in the LCD company, with Apple also making an investment, reports Nikkei citing undisclosed sources.
Sharp and Foxconn didn’t comment on the report.
Sharp spokesman Yoshifumi Seki declined to comment on the company’s earnings outlook. It may enable the electronics giant to prevent laying off 10% of its workforce that would account for nearly 4,600 employees. Foxconn and Apple’s move would help prevent a merger between the two Japan-based display firms, as a merger could reduce Apple’s display supply access while possibly increase costs. Sharp’s LCD business reported consolidated sales of JPY 907.1 billion and operating profit of JPY 30.1 billion in fiscal 2014 but moved into the red in the April-June quarter, with an operating loss of JPY 13.7 billion.
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Meanwhile, other media reports claim that Sharp is talking with public-private Innovation Network of Japan, which is the main shareholder in rival Japan Display.
