Executives of Foxconn Technology Group and Sharp Corp. continued talks in Japan on Tuesday to revise the Taiwan firm’s plan to invest in the ailing Japanese electronics maker.
Visiting Foxconn Chairman Terry Gou told reporters the same day he will release “a clear statement as early as at the end of this month.”
Sharp announced the same day it will solicit applications for voluntary retirement of 2,000 workers, starting Nov. 1.
Gou arrived Monday and held a news conference in Tokyo. He told reporters the two companies need to work around Japan’s high corporate tax, strong yen and expensive labor to make their tieup succeed.
Sharp, facing back-to-back annual losses, is seeking to raise money by selling a stake even as its shares have plunged 71 percent this year. Gou and Foxconn, whose flagship Hon Hai Precision Industry Co. makes Apple Inc. iPads, announced plans March 27 to invest ¥133 billion in the TV maker and its display venture before a decline in Sharp’s market value prompted Foxconn to say it would renegotiate.
“Hon Hai wants to come in as soon as possible,” Gou said Monday. “If Hon Hai can’t come soon to help Sharp speed up development of products, lower manufacturing cost, improve supply-chain management, it’s probably hard to make an achievement.”
Gou, who invested ¥66 billion of his own money in a display venture with Sharp, will be in Japan until Friday, Hon Hai spokesman Simon Hsing said.
Operations at Sakai Display are running smoothly, Gou said.
Foxconn in March agreed to pay ¥66.9 billion for a 9.88 percent stake in Sharp through its Hon Hai and Foxconn Technology Co. units at ¥550 per share. The Taiwanese company said earlier this month it will renegotiate the deal and try to finalize the details by Friday.
The two sides agreed Aug. 3 not to discuss the matter with outside parties, Gou said Tuesday.
Sharp this month widened its loss forecast eightfold as the strong yen, slumping demand for televisions and intensifying competition eroded earnings.
The company is counting on the proposed tieup with Foxconn to turn around its money-losing LCD unit. The unit may lose ¥105 billion in the year ending next March, Sharp said Aug. 2.
The operation rate of the display venture with Gou is expected to rise to 80 percent during the quarter ending Sept. 30 from 30 percent in the previous quarter, helped by orders through the Foxconn group, Sharp said at the time.
Flat TVs plunge
Domestic shipments of flat-panel televisions fell at their fastest pace on record in July, according to industry data.
Shipments fell 84.7 percent from a year before to 414,000 units, the sharpest decline since records began in January 2001, the Japan Electronics and Information Technology Industries Association said Monday.
TV replacement demand remained low after surging before the country completed its shift to digital terrestrial broadcasts in July 2011 except in the three northeastern prefectures hit hardest by the March 2011 disaster.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.