Terry Gou, founder of Hon Hai Precision Industry (Foxconn), will show off an advanced LCD panel factory he jointly owns with Sharp to a delegation of fellow Taiwanese on Thursday. Details of a Hon Hai investment in Sharp may be announced as early as Friday.
ReutersFeeble 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, who wants to tap Sharp’s expertise to produce more panels for Apple, is on the brink of closing a deal that will make his company the biggest shareholder of Sharp, with at least a 9.9 percent stake.
The variable deciding if he makes the investment is the Japanese firm’s willingness to take his advice on how to return to profitability. “Just pure investment is not for me,” Gou said. “I don’t think this is a good investment candidate without any kind of strategic cooperation to improve their productivity.”
The details of Hon Hai’s investment may come as early as Friday.
Gou’s company had agreed to pay 67 billion yen ($854 million), or 550 yen a share back in March, but reopened talks in August to seek a lower price after Sharp’s stock slumped to below 200 yen, as rising losses cast a shadow over its future. Sharp’s shares closed almost 7 percent higher on Wednesday at 230 yen.
