This gives Foxconn/Honhai a globally recognized brand to put on products, which is a big deal for the growth of Taiwan's economy.
Taiwan has gotten decades growth by manufacturing high-tech products for other countries (phones, lcds, etc). But Korea is now posing major competition, and China is investing heavily to catch up.
Strategically, there's still good runway to convert Taiwan's existing manufacturing prowess into a vertically-integrated set of brands that can reap nice retail margins (like Samsung has done).
> But Korea is now posing major competition, and China is investing heavily to catch up.
South Korea has been dominating the LCD market for several years now on the high end, supplying display panels for Apple with fabs in South East Asia. China is flooding the market with cheap panels.
Taiwan is in no mans land playing catch up and labor is too expensive to compete in an industry where margins are razor thin. $6.2 Billion buys you maybe one or two LCD fabs, this is just a drop in the bucket.
Sharp is dull and has been for years, and all the money in the world won't resurrect this corpse.
>Sharp is dull and has been for years, and all the money in the world won't resurrect this corpse.
Reason why no domestic player wanted to touch them with a 10foot pole though jp corps being sitting on huge mountains of money. What honhai did is secure the lcd fabs, get the patents (which seem not to be properly managed atm) and buy into japan inc. The revival of sharp as a brand seems like emotional lipservice to the japanese public.
>Sharp is dull and has been for years, and all the money in the world won't resurrect this corpse.
It's a shame, they've made some really high quality and neat stuff over the years. Anyone remember their Transmeta processor laptops? MM-10, etc. I had one, it was thinner and lighter than the MacBook Air IIRC, and predated it by years. It also had a neat little charging dock that let you access the HDD as a USBHDD. Problem is, I can't see them building a product that competes with Apple, biting the hand that feeds them so to speak. Sharp make amazingly good LCD screens, but that's less important now (quality is less of a distinguishing factor) then it was when they were first doing it.
Well I'm somewhat surprised the Japanese government didn't step up...or in fact any Japanese company. Sharp may be losing money but there display tech is a head of the game, and you know, Japanese nationalism.
LCD know-how is good no doubt, but there are good reason why from the domestic side nobody wanted to step in. Honhai is obviously looking to diversify, but how they will make it work ... Well, time will tell. Let's not forget there are many strong players in CE.
The government kind of stepped up: the Innovation Network Corporation of Japan [0], a fund backed by the government, offered ¥300B cash and a ¥200B credit line [1]. Not as much as Foxconn was offering, so I guess that's why they didn't take it.
Japan and Taiwan are on friendly terms, more so than Taiwan and mainland China.
Japan colonised Taiwan and is considered to have modernised the island. The Japanese period is generally considered to have been better than what came afterwards (Chiang Kai-shek's KMT fleeing the mainland and Mao's thugs). The KMT is considered better than Mao's communist party.
Nice to see that economic reason prevailed over protectionism, but at the same time, sharp would probably be a good company to split into various smaller businesses. It's doing to many barely related things.
Taiwan has gotten decades growth by manufacturing high-tech products for other countries (phones, lcds, etc). But Korea is now posing major competition, and China is investing heavily to catch up.
Strategically, there's still good runway to convert Taiwan's existing manufacturing prowess into a vertically-integrated set of brands that can reap nice retail margins (like Samsung has done).
I suspect this angle is a big part of this deal.