Hon Hai, Sharp considering LCD plant plan in India: report

Taipei-Taiwan-based manufacturing giant Hon Hai Precision Industry Co. (??) and its Japanese subsidiary Sharp Corp. are considering building a liquid crystal display plant in India to meet rising demand for TVs in the country, the Nikkei Asian Review reported Saturday.

The possible investment in India would be the latest in a series of projects contemplated by Hon Hai, also known as Foxconn outside Taiwan, in partnership with Sharp to expand its global flat screen production, the report said.

Hon Hai owns a 66 percent stake in Sharp after completing a US$3.5 billion acquisition deal in mid-August.

Hon Hai and Sharp have also been studying a plan to set up an LCD plant in the United States to tap into demand there for TVs and other electronics devices in response to U.S. President-elect Donald Trump's support for an "America First" policy, the report said.

Sakai Display Products Corp. (SDP), a joint venture between Hon Hai Chairman Terry Gou (???) and Sharp, announced late last year that SDP will build a flat panel plant in China's Guangdong.

In late December, Gou raised his stake in SDP to 53.05 percent from 37.61 percent, while Sharp's stake in the joint venture fell to 26.71 percent.

As for the possible project in India, the Nikkei Asian Review said that while the Sharp brand is not very well known in the country, Hon Hai wants to use the LCD investment to explore the growth potential there for the brand.

According to the report, Gou told Hon Hai's staff that he sees 60-inch TVs becoming the standard in the global TV manufacturing industry and has therefore devised a strategy to build a global flat panel production network to supply big screens to nearby TV assemblers.

Gou was cited in the report as saying that the global production network could lower Hon Hai's costs as part of the global TV production supply chain.

According to the report, Hon Hai has already informed its Japanese suppliers of components for flat panel production of its plans to set up a plant in the U.S. and another in India.

Because the business model built on cheap labor in China, where Hon Hai has a huge production base to churn out devices for such international brands as Apple, has become outdated, Hon Hai wants to take advantage of Sharp's flat panel production technology to create another core business, the report said.

Hon Hai's annual consolidated sales posted negative growth last year for the first time since the company went public in 1991, due to lower-than-expected sales of the latest iPhones.

The company's sales were down 2.81 percent from their 2015 level to NT$4.36 trillion (US$138 billion) in 2016.

Source: Focus Taiwan News Channel