Hon Hai Precision Industry has opened a research center in Japan Friday to strengthen its resources in display and touch technologies. The world's largest contract electronics manufacturer, which purchased a 38 percent stake in a Sharp TV panel plant in Sakai, Japan last year, looks to diversify from the low-margin contract manufacturing business. Hon Hai made the announcement after it failed to secure a deal to become a major shareholder of Sharp.

The new center, called Foxconn Japan RD Co. Ltd., will cover research sectors in manufacturing, technology and equipment and will start operations in Sakai City in Osaka Prefecture and Yokohama City in Kanagawa Prefecture, the Taiwanese firm said in a statement. Hon Hai said added has earmarked 10 billion New Taiwan dollars (US$333 million) over two years for two new panel research centers.

"The research center will become a strategic part of Hon Hai's plans to develop display and cloud applications," the company said in the statement.

The two centers will research and develop flat panels and touch screens of various sizes for everything from smartphones to 70-inch televisions. The technologies developed by the new center will be used in consumer electronics, commercial products and precision medical instruments, according to Hon Hai.

The Taiwanese manufacturing giant, which is best known for building Apple's iPhone, wants greater access to Sharp's leading display technologies to compete with Samsung, according to analysts.

Meanwhile, Sakai Display Products Corp. (SDP), a 10th-generation LCD panel plant in Japan jointly owned by Sharp and Hon Hai Group Chairman Terry Gou, has turned a profit since last October, Hon Hai sources said in April. SDP will reportedly partner with U.S.-based Vizio in launching 80-inch TVs in the United States in the second half of this year after the two jointly began marketing 70-inch TVs there last December.