Rumor: Foxconn wants to acquire Sharp’s LCD division

The Taiwanese hardware manufacturer Foxconn wants to take over the LCD branch of the Japanese Sharp, several anonymous sources report. A partnership or merger with the public-private Innovation Network Corp. of Japan is also possible, partly to keep Sharp’s knowledge within the country.

This is what the Japanese magazine Nikkei writes on its website on Sunday in response to unnamed sources. The Taiwanese Hon Hai, better known under the Foxconn brand, has been in talks with the Japanese electronics giant since the summer. The proposal would result in Foxconn gaining a majority stake in a display manufacturer that would arise after the split from Sharp. With the acquisition, Foxconn would also like to acquire Sharp’s 38 percent minority stake in LCD maker Sakai Display Products.

Apple also has a stake in Sharp’s display division for mobile devices of about 50 billion yen, about 370 million euros. The Cupertino company could have a preference for a possible acquisition by Foxconn, writes Nikkei. The other option is a merger with Japan Display, of which the Innovation Network Corporation of Japan is the majority shareholder. This alternative would reduce potential display vendors for Apple, meaning fewer different companies to play against each other. In Japan, a merger or collaboration with Japan Display could be preferable, because that way Sharp technology does not fall into foreign hands.

Sharp’s LCD division has been underperforming for some time due to declining prices in China. At the moment, the value is around 300 billion yen, about 2.2 billion euros. If an agreement is not reached quickly, that value could fall quickly due to the low prices in China, according to one of the anonymous sources. The troubles surrounding Sharp’s display department have been going on for some time. In April this year, the company already appeared to be flirting with the Innovation Network Corporation of Japan.