The global electronics industry has shifted massively in the past several years. And it seems that the trend hasn’t finished yet.
Foxconn, formally known as Hon Hai Precision Industry Co., is a manufacturing company based in China. The electronic company offers cheap costs with massive scale to help make the iPhone, the company’s main product. The giant assembling company announced that it would acquire Japanese consumer electronics company Sharp for $3.5 billion.
And Foxconn is eager to accomplish taking over the Japanese company by the end of this week. However, the concerns are about Sharp’s liabilities. This concern delayed the acquisition process for several weeks before.
The deal will give Foxconn a 66 percent stake in Sharp representing the first foreign company to acquire a crucial firm in Japan’s electronic technology industry.
The acquisition will give Foxconn a new screen technology known as organic light emitting diode, or OLED. This would provide Foxconn the technology with thinner and more flexible screen which Apple is expected to use in future products. Thus, Foxconn could integrate a better and efficient supply chain to Apple in hope to gain shares from Samsung, one of Sharp’s rivals, in the global OLED industry.
Analysts said the purchase could help Foxconn to gain greater share of the global smartphone supply chain, as both a manufacturer and an assembler of parts, and better position the company as a supplier to Apple in the future. Foxconn has helped Apple to assemble the iPhone and iPad for a long time, but Apple has shifted some of its production to competitors, such as another Taiwanese company Pegatron in recent years.