Foxconn, Sharp Corp plan to build $8.8 bn LCD factory in China

The Dollar Business Bureau

A joint venture between Taiwanese major Foxconn technology Group, also known as Hon Hai Precision Industry Co., and Sharp Corporations plans to establish a factory with an investment of $8.8 billion (61 billion yuan) in China to manufacture LCDs (liquid-crystal displays).

The plant of Sakai Display Products Corporation will be a Gen-10.5 facility, which is specialised in manufacturing large-screen LCDs and will start operating by 2019, the company said on Friday in Guangzhou at a signing event with local officials.

The facility will have the capacity equating to around 92 billion yuan per year, it added.

The aim of the huge investment is to increase production in order to meet estimated rising demand in Asia for large-screen televisions and monitors.

The global output of LCDs was affected this year due to the closing of a Samsung plant that accounted for around 3% of the market share, along with factory stoppages in Taiwan post-earthquake in March.

The largest LCD panel maker in China, BOE Technology Group, started building its own Gen-10.5 facility in Hefei in the month of December last year, with the production slated to start in 2018.

The plan of Sakai Display Products Corp for the Guangzhou facility come as Hon Hai look for turning the JV into a subsidiary, by investing an overall amount of 15.1 billion yuan in the firm.

In addition, the JV will sell 436,000 shares at a cost of 17.1 billion yuan to an investment co-run by Hon Hai Chairman Terry Gou, which gives Hon Hai a 53% interest in the business and lower Sharp’s shareholding to 26% from 40%.