Foxconn Buys into Sharp, Likely Thinking Apple

Apple’s contract manufacturer Foxconn and its Taiwanese avatar the Hon Hai Group are buying 9.9% of struggling Osaka-based electronics conglomerate Sharp. They’ll get $1.6 billion worth of new Sharp shares. It’s the biggest investment a Taiwan company has ever made in a Japanese company and Hon Hai will be Sharp’s largest stockholder. It’s a big comeuppance for Japanese industry. Sharp expects to lose $3.49 billion this fiscal year, which ends March 31. Hon Hai will also take half of Sharp’s 92.96% position in its losing LCD panel unit. At least until September Sony owns the rest but won’t put any more money in it. The failure of the four-year-old Sharp-Sony alliance is said to be the reason Sharp turned to Hon Hai, whose LCD operation is also losing money. Sharp’s IGZO screen technologies and production facility are leading-edge.

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