Hitachi Ltd. is negotiating with Taiwan’s Hon Hai Precision Industry Co., the world’s largest contract electronics maker, to pick up its controlling stake in a liquid crystal display unit, sources said Monday.
The Taiwanese manufacturer, widely known as Foxconn, will likely invest around ¥100 billion in Hitachi Displays Ltd., now owned 75.1 percent by Hitachi with the remainder held by Canon Inc.
Hon Hai is expected to take a majority stake in Hitachi Displays by acquiring new shares to be issued by the Hitachi subsidiary.
Hitachi Displays is expected to use the proceeds to establish a new plant in Chiba Prefecture.
Hitachi apparently wants to rid itself of unprofitable operations to focus on its infrastructure business. Hon Hai will probably tap Hitachi’s knowhow in LCD panels to lower production costs for displays used in smart phones, the sources added.
Hitachi Displays already contracts part of its LCD production out to Chimei Innolux Corp., a Hon Hai group firm.
If they team up, Chimei and Hitachi Displays will probably command a combined share of the global LCD market comparable to that of industry leader Sharp Corp.
Hon Hai makes display panels for Apple Inc.’s iPhones and iPads and has been expanding production by buying Sony Corp.’s LCD television factories in Mexico and Slovakia.
Canon sought to turn Hitachi Displays into a subsidiary before scrapping the plan in September.