Hon Hai Precision Industry Co’s (鴻海精密) rescue of Sharp Corp promises to bolster the Taiwanese electronics maker’s ambitions for a bigger role in “clean” energy in some of the world’s most-polluting countries, while also providing a firmer footing in Japan.
Hon Hai, also known as Foxconn Technology Group (富士康), has announced plans to improve energy efficiency at its factories and introduce more solar power in China and India. By buying Osaka-based Sharp, Hon Hai gains a company regarded as a pioneer in the development of solar panels.
“A merger with Sharp would give Foxconn access to a well-known brand name under which to sell its solar panels and also strong distribution networks in Japan for wider solar-as-a-service offerings with smart home and battery technologies,” Bloomberg New Energy Finance head solar analyst Jenny Chase said by e-mail.
In October last year, Hon Hai said that it planned to build 400 megawatts (MW) of solar power capacity by 2018, starting in China’s Henan Province, as part of an initiative led by Apple Inc.
The company makes iPhones and iPads for Apple at its factories in China.
In June last year, Foxconn, with Japan’s Softbank Group Corp and Bharti Enterprises Pvt of India, announced the establishment of a US$20 billion venture to add 20 gigawatts of clean-energy capacity in India.
In December last year, the venture won its first solar project in India, a 350MW solar plant in southern Andhra Pradesh.
The acquisition of Sharp gives Hon Hai access to technologies for distributed power and “smart community” businesses, Tokyo-based Rikkyo University political economy professor Andrew DeWit said.
“Considering Japan’s already large and expanding focus on national resilience via smart communities, Foxconn would be unwise not to look at the big picture as opposed to merely the short-term bottom line,” he said by e-mail.
Hon Hai earlier last year said that it was in talks with UK investors to raise about US$1.7 billion to make its operations in China more environmentally friendly, with plans for solar farms, to replace air conditioning systems and to install efficient lighting systems.
By itself, Foxconn has the capacity to make at least 400MW per year of solar products in Funing, China.
The company also has a module plant in Juarez, Mexico, according to Chase.
Sharp, which began developing solar energy in 1959 and remains its oldest major manufacturer, has 500MW of cell capacity and probably has some module capacity, she said.
Still, the ultimate fate of Sharp’s solar business is unclear even after the deal’s conclusion.
Hon Hai is paying ¥389 billion (US$3.53 billion) for a controlling stake in Sharp, which on Wednesday last week said that it intends to use ¥8 billion from the infusion to shore up its energy solutions business.
That was the smallest amount planned for its different business segments. About ¥200 billion has been allocated for next-generation screens using organic LEDs.
Sharp is to continue to move ahead with its energy solutions business and to provide after-sale services for solar panels and other energy-related products, Sharp president Kozo Takahashi said in a statement on Monday.
“We will work on strengthening sales of residential solar panels, storage batteries and home energy management systems,” he said.
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FUTURE PLANS: Although the electric vehicle market is getting more competitive, Hon Hai would stick to its goal of seizing a 5 percent share globally, Young Liu said Hon Hai Precision Industry Co (鴻海精密), a major iPhone assembler and supplier of artificial intelligence (AI) servers powered by Nvidia Corp’s chips, yesterday said it has introduced a rotating chief executive structure as part of the company’s efforts to cultivate future leaders and to enhance corporate governance. The 50-year-old contract electronics maker reported sizable revenue of NT$6.16 trillion (US$189.67 billion) last year. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), has been under the control of one man almost since its inception. A rotating CEO system is a rarity among Taiwanese businesses. Hon Hai has given leaders of the company’s six