Taiwan's Foxconn denies knowledge of Guangzhou panel plant sale

Hon Hai Precision Industries says it does not own China-based panel plant, unclear about possible sale

Taiwan's Foxconn denies knowledge of Guangzhou panel plant sale

(CNA photo)

TAIPEI (CNA) -- Hon Hai Precision Industry Co., a Taiwan-based electronics manufacturing giant, said Friday it had no information about a media report which said the company is seeking to sell a large flat panel plant in Guangzhou, China.

In a statement, Hon Hai, also known as Foxconn on the global market, said the company does not own the China-based panel plant and so is unclear about a possible disposal of the advanced 10.5th generation flat panel plant, which will specialize in large-sized high definition screens for TV and other electronics gadgets when it is completed.

However, although Hon Hai does not own the plant, the factory is owned by Osaka-based Sakai Display Products Corp. (SDP), a joint venture between Terry Gou (郭台銘), founder of Hon Hai, and Japan's Sharp Corp.

Gou stepped down as chairman of Hon Hai in June after he announced a bid in April to take part in the opposition Kuomintang (KMT's) primary for the 2020 presidential race.

Gou, who remains on the board of directors at Hon Hai, lost to Kaohsiung Mayor Han Kuo-yu (韓國瑜) in the KMT primary held in July.

Hon Hai issued the statement after a Reuters report cited sources as saying earlier in the day that the company is exploring the possibility of selling its new US$8.8 billion flat panel factory in Guangzhou.

According to the Reuters report, Hon Hai has entered negotiations to appoint banks to find a buyer for the Guangzhou plant, construction of which is still under way.

The report said Hon Hai is seeking to dispose of the Guangzhou plant as demand for screens has been impacted by escalating trade friction between the United States and China, which "has disrupted technology global supply chains in a major way, forcing Foxconn to review its own."

On Thursday, U.S. President Donald Trump said in a series of tweets that Washington will impose a 10 percent punitive tariff on an additional US$300 billion worth of Chinese goods, effective on Sept. 1. The announcement exacerbated global trade turmoil.

According to the report, the global flat panel industry has been struggling due to a supply glut and tumbling earnings in the wake of weakening smartphone and TV sales, while the trade disputes could boost product prices which would further hurt demand.

The report added that talks about the disposal plan remain in the initial phase and no price tag has yet been agreed.

At the end of December 2016, Gou signed an agreement with the Guangzhou authorities to invest 61 billion Chinese yuan (US$8.86 billion) to build the flat screen complex which will focus on organic light-emitting diode (OLED) screen production.

It is the largest single investment project in Guangzhou since the start of China's economic reforms in 1978 under Deng Xiaoping.

The Guangzhou plant, which is scheduled to begin mass production at the end of September, is expected to roll out 90,000 units of glass substrates a month, 3,370 mm x 2,940 mm in size, which will be mainly used for the production of 65-inch and 75-inch high definition screens to create an 8K technology ecosystem in the Pearl River Delta area.

Updated : 2021-03-07 11:46 GMT+08:00