On Monday, 27 March 2012, Japanese electronics maker Sharp said that it will form a strategic global manufacturing partnership with Foxconn parent Hon Hai Precision Industry Co. This partnership will enable Foxconn to take eleven percent ownership in Sharp. In a nutshell, an assembly company has just purchased a stake in a manufacturer.
Foxconn is Apple’s long-standing manufacturing partner producing iPhones, iPads and Mac notebooks. It also manufactures PlayStation 3s, Xbox 360s. Plus, Foxconn is a host of other consumer electronics products for Western companies.
On the other hand, Sharp is currently on Apple’s list of supply chain partners. It is believed that Sharp has produced 2.71 million Retina display panels for the new iPad, with plans to ramp up production in the second quarter. This strategic partnership should also help Foxconn and Sharp together battle LG and Samsung for Apple orders.
Combining their respective operations, Foxconn and Sharp will together run Sharp’s LCD plant in Sakai. Sharp will also be benefitted from Foxconn’s size as it will gain a much-needed leverage in negotiations over parts prices.
Revenues will be split evenly between the two partners and Foxconn will get an eleven percent ownership stake in Sharp. As for the LCD plant in Sakai, Osaka, Sharp and Foxconn will hold a 46.5 percent stake each, with Sony also owning seven percent of the operation.
A rumor in August 2012 asserted that Apple would invest a whopping one billion dollars in a Sharp LCD plant. While this never came to be, Apple’s fortunes are closely tied to Foxconn’s ability to manufacture gadgets on time and in volume. Foxconn is by far the world’s largest contract manufacturer of consumer electronics and it employs an estimated million workers.
Source: iDownload Blog