Hon Hai, Sharp mull major LCD display panel plant in China

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OSAKA – Taiwan’s Hon Hai Precision Industry Co. and Sharp Corp., its subsidiary, are considering building a new plant in China to produce liquid crystal display panels for televisions, sources familiar with the matter said Saturday.

With total investment possibly at around ¥800 billion ($6.9 billion), they envision beginning production for large TVs in 2019 at the earliest, according to the sources. As TVs in Asia shift from cathode ray tubes technology to LCDs, the companies see China and Southeast Asia as their target market, they said.

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Guangzhou in Guangdong province is one of the candidate sites for the plant, the sources said.

The funds will be mainly provided by Hon Hai, an Apple Inc. supplier also known by its trade name Foxconn, while Sharp will offer the technologies, they said. They hope the government of the site hosting the plant will also put money into the project.

The companies plan to produce the largest class of panels at the new plant, and they will be larger than ones made at Sakai Display Products Corp. in Osaka, a facility jointly run by the two firms, or Sharp’s Kameyama No. 2 plant in Mie Prefecture.

South Korea’s LG Display and Samsung Electronics claim nearly half of the global market for LCD panels. Chinese makers are also making headway.

Hon Hai and Sharp hope to compete by lowering production costs and using technologies from Sharp’s Aquos brand TVs, according to the sources.

Industry analysts, however, are concerned the project may not be as profitable as anticipated with respect to the amount of investment because LCD panel prices are fluctuating.

Sharp became a Hon Hai subsidiary in August after its business deteriorated due mainly to poor LCD business operations.

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