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Hon Hai, SK C&C agree to joint venture in China's IT market

Hon Hai, SK C&C agree to joint venture in China's IT market

Taipei, March 26 (CNA) Taiwan's Hon Hai Precision Industry Co. signed a strategic partnership agreement Thursday with SK C&C Co., a leading South Korean information technology (IT) services provider, to form a joint venture for the Chinese market.

The joint venture between SK C&C and the world's largest contract electronics maker is expected to begin operation in May to integrate IT services with Hon Hai's smart factory and automation technology, Hon Hai said in a statement.

The joint venture is part of Hon Hai's "Industry 4.0" initiative -- the computerization of production technology for the smart factory -- to expand into the healthcare, memory module and financial sectors, according to the statement.

No financial or other details of the agreement were disclosed.

In June last year, Hon Hai invested US$376 million to acquire a 4.9 percent stake in SK C&C, a subsidiary of the SK Group, South Korea's third-largest business group. The transaction makes Hon Hai the second-largest shareholder of SK C&C.

Analysts said that Hon Hai's purchase of a stake in SK C&C should also bring more synergy to telecom, cloud and IT services, which will be Hon Hai's focus in the coming five to 10 years as it leverages its exposure in the Greater China market.

Hon Hai, also known as Foxconn Technology Group, assembles iPhones and iPads for Apple Inc. and is seeking to diversify from its low-margin manufacturing business.

Shares of Hon Hai fell 0.95 percent to NT$93.5 (US$2.99) Thursday in Taipei morning trading.

Updated : 2021-09-20 17:31 GMT+08:00