Hon Hai Precision Industry and Sharp are planning to build the world's largest LCD factory in China, aiming to compete more effectively against South Korean and Chinese rivals.
The Taiwanese contract electronics manufacturer and Japanese subsidiary Sharp intend to begin low-cost mass production of liquid crystal display panels for televisions as early as 2019, Nikkei reported on Firday. The project will likely be partly subsidized by local governments, with the the total investment to exceed 800 billion yen ($6.95 billion).
Foxconn and Sharp produce TV panels through joint venture Sakai Display Products and Taiwanese Foxconn unit Innolux as well as at Sharp's Kameyama No. 2 plant in Japan. Sakai Display operates a plant using 10th-generation glass substrates for more efficient production. The new Chinese facility would work with even bigger substrates.
Hon Hai and Sharp hold roughly 20% of the global TV panel market, putting them in third place, behind Samsung Electronics and LG Display. In China, BOE Technology Group and Shenzhen China Star Optoelectronics Technology are building big LCD plants, with support from regional governments, that are due to go online around 2018 or 2019.
This project would likely enable the two companies to recoup their investment faster than from their OLED panel project as well as better exploit synergies between them.
Sharp has decided to set up a prototype OLED production line in Japan and is considering a mass production line in China. The South Korean competition has gotten the jump on the Japanese company, which still faces high technical hurdles to mass production.