Shock waves were felt on Wednesday when Hon Hai Precision Industry Co (鴻海精密) announced a deal with Sharp Corp worth ¥132.9 billion (US$1.6 billion), allowing Hon Hai to share half the capacity of an advanced 10th-generation (10G) LCD factory owned by Sharp and Sony Corp, as well as a 10 percent stake in the premium Japanese TV brand.
Just three or four years ago, such a partnership would have been unthinkable, as Taiwanese companies have mostly played minor roles as component suppliers to Japanese clients, or as assemblers of low-end products.
The newly unveiled Hon Hai-Sharp alliance has taken the relationship between Taiwanese and Japanese electronics manufacturing firms to a new level, advancing Hon Hai’s ties with the Japanese company to that of an equity investor.
The deal shows that Japanese firms need to step up collaboration with overseas partners to generate profits and to safeguard market position, amid its strong currency and the rise of South Korean firms: A set of circumstances not altogether unfamiliar to Taiwanese firms.
The deal marked the first major strategic alliance between Taiwan and Japan as companies from both countries look to fend off competition from rivals, such as Samsung Electronics Co.
South Korean brands Samsung and LG have replaced Japanese brands as consumers’ top choices when buying new TVs. Furthermore, Samsung led its rivals in launching a low-cost LED TV and has tried to sell them to households in emerging markets.
Market researcher DisplaySearch’s latest statistics showed that Samsung and LG commanded a combined 40 percent of the world’s flat-panel TV market, while Japan’s big three — Sony, Panasonic and Sharp — saw their share drop to a combined 23 percent.
Sharp, the world’s No. 5 TV brand, faces mounting financial pressure after it posted a net loss of ¥213.5 billion for the three-quarter period ending Dec. 31, because of losses after operations were suspended at a large-size LCD plant.
Hopefully, the new partnership will help heal the nagging pain experienced by Hon Hai and other Taiwanese manufacturers because of their lack of development in areas such as branded business and advanced technologies, which puts them at a disadvantage when digesting capacity and making profits.
Cooperating with Sharp could help Hon Hai obtain more advanced LCD technologies to help meet growing demand for the high-resolution screens used in smartphones and other mobile devices.
With Sharp’s supply of large flat panels from the 10G factory, it is quite likely that Hon Hai will receive new orders from Apple to manufacture LCD TVs, as well as its current assembling of iPhones and iPads for the US company.
For Sharp, it can now share the expense of the expensive 10G facility. It could also cut costs by farming out more production to Hon Hai, which would also help Hon Hai digest more panels produced by its LCD arm, Chi Mei Innolux Corp (奇美電子), which is especially important since it is still suffering the effects of an oversupply-driven price slump.
However, while this deal appears to promise much for the nation’s LCD industry, a similar scenario appears unlikely to take place in other industries, such as the semiconductor sector. Rather than gain resources, Taiwan’s PC DRAM industry could lose technological support from Japan’s top memory company, Elpida Memory Inc, after it filed for bankruptcy protection earlier this year as the company could accept potential investment bids from South Korea’s Hynix or Japan’s Toshiba.
However, it would be difficult for Taiwanese companies in other sectors, such as the semiconductor industry, to follow the same model because they would find it hard to find suitable partners in Japan due to the decline of their Japanese peers.
The past few months have seen tremendous strides in India’s journey to develop a vibrant semiconductor and electronics ecosystem. The nation’s established prowess in information technology (IT) has earned it much-needed revenue and prestige across the globe. Now, through the convergence of engineering talent, supportive government policies, an expanding market and technologically adaptive entrepreneurship, India is striving to become part of global electronics and semiconductor supply chains. Indian Prime Minister Narendra Modi’s Vision of “Make in India” and “Design in India” has been the guiding force behind the government’s incentive schemes that span skilling, design, fabrication, assembly, testing and packaging, and
Singaporean Prime Minister Lee Hsien Loong’s (李顯龍) decision to step down after 19 years and hand power to his deputy, Lawrence Wong (黃循財), on May 15 was expected — though, perhaps, not so soon. Most political analysts had been eyeing an end-of-year handover, to ensure more time for Wong to study and shadow the role, ahead of general elections that must be called by November next year. Wong — who is currently both deputy prime minister and minister of finance — would need a combination of fresh ideas, wisdom and experience as he writes the nation’s next chapter. The world that
As former president Ma Ying-jeou (馬英九) wrapped up his visit to the People’s Republic of China, he received his share of attention. Certainly, the trip must be seen within the full context of Ma’s life, that is, his eight-year presidency, the Sunflower movement and his failed Economic Cooperation Framework Agreement, as well as his eight years as Taipei mayor with its posturing, accusations of money laundering, and ups and downs. Through all that, basic questions stand out: “What drives Ma? What is his end game?” Having observed and commented on Ma for decades, it is all ironically reminiscent of former US president Harry
Recently, China launched another diplomatic offensive against Taiwan, improperly linking its “one China principle” with UN General Assembly Resolution 2758 to constrain Taiwan’s diplomatic space. After Taiwan’s presidential election on Jan. 13, China persuaded Nauru to sever diplomatic ties with Taiwan. Nauru cited Resolution 2758 in its declaration of the diplomatic break. Subsequently, during the WHO Executive Board meeting that month, Beijing rallied countries including Venezuela, Zimbabwe, Belarus, Egypt, Nicaragua, Sri Lanka, Laos, Russia, Syria and Pakistan to reiterate the “one China principle” in their statements, and assert that “Resolution 2758 has settled the status of Taiwan” to hinder Taiwan’s