Foxconn joint venture to build $8.8 billion LCD plant in China

BEIJING: A joint venture between Hon Hai Precision Industry Co (2354.TW), known as Foxconn, and Sharp Corp plans to build a 61 billion yuan ($8.8 billion) factory in China to produce liquid-crystal displays (LCDs).

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Sakai Display Products Corp’s plant will be a so-called Gen-10.5 facility specialising in large-screen LCDs and will be operational by 2019, the company said at a signing event with local officials in Guangzhou on Friday. It said the plant will have capacity equating to 92 billion yuan a year.

The heavy investment is aimed at increasing production to meet expected rising demand for large-screen televisions and monitors in Asia.

Global LCD output was hit this year by the closure of a Samsung factory that accounted for 3 percent of the market, as well as factory stoppages in Taiwan after an earthquake in March.

China’s largest LCD panel maker, BOE Technology Group, began construction on its own Gen-10.5 plant in Hefei in December last year, with production scheduled to begin in 2018.

In May Shenzhen China Optoelectronics Technology Co, a subsidiary of TCL Corp announced that it would begin construction on a 50 billion yuan LCD plant in Shenzhen.

Sakai Display Products Corp’s plans for the Guangzhou plant come as Hon Hai seeks to turn the joint venture into a subsidiary, investing a total of 15.1 billion yuan in the company.

The venture will also sell 436,000 shares for 17.1 billion yuan to an investment co-owned by Hon Hai Chairman Terry Gou, giving Hon Hai a 53 percent interest in the business and lowering Sharp’s stake from to 26 percent from 40 percent.

Reuters

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