Foxconn in no rush for potential Sharp deal

Hon Hai Precision Industry, also known as Foxconn, says there is no urgency in securing an investment deal with Sharp.

Liu Jiayi/ ZDNet

Foxconn is in no rush to secure an investment deal with struggling firm Sharp.

On Wednesday at an annual general meeting, the manufacturing giant's chairman Terry Gou said that some Sharp assets have been purchased, and negotiations are continuing to secure a 10 percent stake in the Japanese electronics maker. No deal has yet been reached.

According to Bloomberg, Foxconn has been aggressively ramping up capacity in order to manufacture large panels used in high-resolution television screens. As part of this effort, the Asian giant is looking to Sharp and the company's factories to provide manufacturing assets.

"We hope to help turn around Sharp's operation," Gou commented. "I believe that Sharp will make a wise decision."

Last year, Gou agreed to acquire a 50 percent stake in Sharp's panel-making plant in Sakai, Japan, in addition to purchasing a 10 percent stake in the electronics maker for $664 million. However, once financial estimates for future earnings began to plunge and shareholders reacted, Foxconn pulled out of the proceedings.

Sharp CEO Kozo Takahashi and Gou have met over the past several months to discuss future business options.

Foxconn, the largest assembler of parts for Apple's iPhones and iPads and the biggest contract electronics manufacturer worldwide, has continued to negotiate for the stake, and said it hopes to reach an agreement soon.

Due to a weak yen and poor consumer demand, Sharp has seen profits plummet and has struggled financially. However, as a maker of LCD screens for a number of mobile and television-based products, other tech giants have chipped in to prevent the company from sinking.

This month, U.S.-based chipmaker Qualcomm officially became the company's third-largest shareholder after granting Sharp the second half of a $120 million investment.

Qualcomm subsidiary Pixtronix now owns a total stake of 3.53 percent and 11,868,000 additional shares in Sharp. The agreement between Pixtronix and Sharp includes the joint-development of next generation MEMS (Micro Electro Mechanical System) display technology screens. Under the terms of the deal, Sharp will produce screens in varying sizes that combined MEMS with the company's power-conserving IGZO (Indium Gallium Zinc Oxide) technology.

South Korean electronics giant Samsung has also paid 10.4bn yen ($112m) for a three percent stake in Sharp.