Foxconn joint venture to build $8.8-bn LCD facility in China

Japan's Sakai Display Products Corp (SDP), a joint venture between Hon Hai Precision Industry Co, known as Foxconn and Sharp Corp, plans to build a 61-billion yuan ($8.8 billion) factory in China to produce liquid-crystal displays (LCDs), Reuters reported.

SDP's plant would be a so-called Gen-10.5 facility specialising in large-screen LCDs and become operational by 2019, according to the company. The company added that the plant would have capacity equating to 92 billion yuan a year.

The heavy investment was aimed at boosting production to meet increased demand for large-screen televisions and monitors in Asia.

Global LCD took a hit this year, from the closure of a Samsung factory that accounted for 3 per cent of the market, as also production stoppages in Taiwan following an  earthquake in March.

China's largest LCD panel maker, BOE Technology Group, started construction of its Gen-10.5 plant in Hefei in December last year, and the production is set to start in December 2018.

According to commentators, Hon Hai has plans to turn the joint venture into a subsidiary, with a total of 15.1 billion yuan in the company.

The venture also plansto sell 436,000 shares for 17.1 billion yuan to an investment co-owned by Hon Hai chairman Terry Gou, which would give Hon Hai a 53 per cent interest in the business and reduce Sharp's stake from to 26 per cent from 40 per cent.

Meanwhile, Gou, said yesterday that Chinese local authorities were showing a high level of efficiency and more sincerity compared with their US counterparts when it came to attracting foreign investment, including in manufacturing and hi-tech industries, South China Morning Post reported.

Gou made the comments in Guangzhou as the municipal government signed a framework agreement with SDP, which is mostly owned by Gou personally. The panels will use technology from Sharp Corp, the Japanese electronics brand bought this year by Foxconn.