Sat, Nov 03, 2012 - Page 14 News List

Sharp, Hon Hai in talks but difficulties remain

FORGING AHEAD:Issues such as Sharp’s recent share price plunge are complicating talks between the two companies as they explore Asia’s smartphone market

CNA, with Staff writer

Talks on a capital tie-up between Japan’s Sharp Corp and Taiwan’s Hon Hai Precision Industry Co (鴻海精密) are ongoing, but there are still difficulties to overcome, Kyodo News reported yesterday.

Citing comments made by Sharp president Takashi Okuda at a Tokyo press conference a day earlier, Kyodo News reported that the Japanese company is continuing talks with its Taiwanese partner.

However, the news agency quoted Okuda as conceding that there are difficulties in the negotiation process as Sharp’s stock price has plummeted since the two reached an accord in March. Hon Hai declined to comment on the progress of the talks yesterday.

The Kyodo News report came on the heels of another report it made late last month that Sharp has entered into talks with Apple Inc, Google Inc and Microsoft Corp on forming alliances for its advanced liquid-crystal display panels. Sharp has also sounded out Hewlett-Packard Co about investing in the Japanese electronics maker after its business performance picks up, the agency reported.

Hon Hai announced in late March its acquisition of a roughly 10 percent stake in Sharp for US$800 million, which made it the Japanese company’s largest shareholder.

Hon Hai chairman Terry Gou (郭台銘) also agreed to acquire a 46.5 percent stake under his own name in Sharp’s Sakai-based 10th-generation LCD panel plant for an additional US$800 million. Gou said in August that the two companies are renegotiating the deal following the slump in Sharp’s stock price and he hopes to finalize it by March 31.

Meanwhile, the two companies continue to cooperate to jointly tap into China’s smartphone market. Foxconn International Holdings (富士康控股), a Hon Hai subsidiary, and Sharp both launched handsets in China, Hong Kong and Taiwan in late August.

Foxconn has moved into the development of new handset models and its handset clients are considering the option of using Sharp’s supply of indium gallium zinc oxide panels, the latest panel technology available at Sharp, according to industry sources.

On large-sized panel cooperation, Hon Hai said in August that it will move toward vertical integration of design, research and development, and production of large-sized panels in Taiwan after its acquisition of the Sakai-based plant.

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