Foxconn is looking to take over more of the iPhone manufacturing process as it has offered ¥625 billion ($5.3 billion) to acquire Japanese manufacturer Sharp, which currently manufactures displays for Apple devices.
Sharp has been running into problems as of late, with a net loss of ¥222 billion in the fiscal year ending March 2015 and two bank-led rescues in the past three years. In its most recent half-year results, Sharp recorded an operating loss of ¥25.2 billion, based on declining demand for smartphone displays among Chinese manufacturers.
Foxconn has long shown an interest in the company. Foxconn CEO Terry Gou personally acquired 38 percent ownership of a Sharp display factory in Sakai, Japan, back in 2012, although a subsequent deal for Foxconn to purchase a 10 percent stake in Sharp as a company fell apart.
The chief impediment to a Foxconn takeover could be intervention on the part of Japanese officials to stop a Japanese company from being acquired by a foreign business.
If so, this wouldn’t be the first time Foxconn has tried and failed to seize a bigger slice of the iPhone manufacturing pie. Back in October, Foxconn made a bid for a share in chip-making company Siliconware Precision Industries, only for this to be shot down by SPIL’s board of directors.
If all goes according to plan, however, Foxconn may be about to become even more inextricably linked with iPhone production. And given that, under Sharp’s current ownership, Apple has had to help bail it out in order to keep supplies flowing, that could wind up being a good thing for Cupertino overall.
Source: WSJ
