Hon Hai Precision Industry Co (鴻海) is reportedly teaming up with China’s Huawei Technologies Co (華為) to produce high-definition slim panels in China, but regulatory obstacles remain.
As part of its efforts to expand Hon Hai’s flat-panel business in China, the Taiwanese company reportedly plans to invest 25 billion yuan (US$3.92 billion), while Huawei would invest 5 billion yuan and the Guizhou provincial government would inject capital to build a 6G low-temperature polysilicon (LTPS) TFT-LCD plant in the province, the Chinese-language Commercial Times reported yesterday.
The newspaper said that the Guizhou plant would become operational at the end of 2018 or at the beginning of 2019, with initial monthly capacity of between 25,000 and 30,000 sheets.
The high-definition slim LTPS are widely used on mobile phones, such as on Apple Inc’s iPhone models.
This would be Hon Hai’s latest investment in LTPS panels after its joint investment with its LCD panel maker subsidiary Innolux Corp (群創光電) in a LTPS plant in Kaohsiung last year.
Innolux, in which Hon Hai has about a 4.61 percent stake, is playing a supporting role of providing advice and employees in the deal, and Hon Hai is taking the leading role in the planned investment, the report said.
Hon Hai responded to the newspaper story by filing a statement with the Taiwan Stock Exchange, saying “if there is any planned investment, the company will propose the plan to its board for approval.”
A source in Hon Hai, who declined to be named due to the sensitivity of the planned investment, told the Taipei Times that “Hon Hai cannot comment too much on the report for the time being, but the company is drafting an investment plan for building an LTPS panel plant [in China].”
However, the Investment Commission said it would reject Hon Hai’s proposed investment, because Taiwan’s China-bound investment regulations only allow Taiwanese panel makers to invest in flat-panel plants in the country.
“Hon Hai is not a panel maker, so it cannot invest in China’s flat-panel plants. However, if the investment is proposed by Innolux, then the commission will accept the application and deliberate it,” commission executive secretary Emile Chang (張銘斌) said by telephone.
Chang said the commission would evaluate the details of the planned investment and see if it would pose national security risks to Taiwan.
Hon Hai shares dropped 0.47 percent and Innolux’s stock price declined 1.31 percent yesterday in Taipei trading, while the TAIEX fell 0.57 percent.
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