Fri, Nov 09, 2012 - Page 13 News List

Hon Hai deal gives SDP boost

IINVESTMENT:In July, Hon Hai Group chairman Terry Gou bought 979,200 shares, or a 37.6 percent stake, in Japanese flat screen manufacturer SDP for ¥49 billion

By Lisa Wang  /  Staff reporter

A model poses by a large TV during a show in Taipei yesterday. Companies such as Chunghwa Telecom, Kbro and STV, which provide services based on the subscription fees model, are set to boost domestic demand for large TVs.

Photo: Wang Yi-hung, Taipei Times

Hon Hai Precision Industry Co Ltd (鴻海精密), the major assembler of Apple Inc’s iPhone and iPad, yesterday said it is making 60-inch LED TVs for the nation’s top telecoms operator, Chunghwa Telecom Co (中華電信), using flat screens from money-losing Sakai Display Productions Co (SDP) in Japan.

The company also announced it was supplying 60-inch LED TVs for local multiple system operator Kbro Co Ltd (凱擘) and was in talks with more content providers to supply these flat-screen TVs to China, Hon Hai Group (鴻海集團) vice chairman Tai Cheng-wu (戴正吳) said.

SDP also plans to make 70-inch and 80-inch displays for TVs in the near future, he said.

In July, Hon Hai Group chairman Terry Gou (郭台銘) bought 979,200 shares, or a 37.6 percent stake, in SDP for ¥49 billion (US$614 million) via his own company SIO International Holdings Ltd.

SDP operates the world’s sole 10th-generation LCD plant in Sakai, Japan, with an annual capacity of 6 million 60-inch displays. SIO and Sharp, which also holds a 37.6 percent share of SDP, own half the capacity each, Hon Hai said.

Through partnerships with Internet TV operators and TV brands, Gou hopes to maintain capacity utilization at SDP’s factories and help it stem chronic losses.

SDP’s capacity utilization has risen from as low as 20 percent to 70 percent following Gou’s equity investment, Tai said.

SDP is set to make super high-resolution displays, dubbed 4KX2K displays, next year.

“We aim for SDP to break-even in the fourth quarter of this year and hope its operations will improve further next year,” Tai said.

SDP is expected to launch an initial public offering program on the local stock market in 2015 or 2016, he said.

Chunghwa Telecom and Kbro are offering the 60-inch LCD TVs at NT$38,800 a unit, a price even lower than a 46-inch LCD TV.

Chunghwa Telecom said it hoped to boost the number of media-on-demand service subscribers it has to 1.4 million, up 22 percent from the current 1.18 million, through subsidized flat-screen TVs.

Kbro plans to sell 5,000 of its own-brand 60-inch TVs made by Hon Hai before the Lunar New Year holidays, which fall in February.

Last month, Vizio Inc started selling 60-inch TVs made by Hon Hai in North America for US$999 per unit. The US TV brand hopes to sell 400,000 60-inch TVs in the current quarter, market researcher NPD DisplaySearch said yesterday.

In addition to Chunghwa Telecom and Kbro, China’s Le TV (樂視) is expected to be Hon Hai’s next partner, Tai said.

The collaboration “is likely to take place after the [Lunar] New Year holidays next year,” he said.

The major broadcaster in China’s Hunan Province, Hunan Satellite TV (湖南衛視), was also on the shortlist, Tai added.

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