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$8.8 billion LCD plant in China to be Built by Foxconn Joint Venture


$8.8 billion LCD plant in China to be Built by Foxconn Joint Venture
To produce liquid-crystal displays (LCDs), a 61 billion yuan ($8.8 billion) factory in China is being planned to be built by a joint venture between Hon Hai Precision Industry Co, known as Foxconn, and Sharp Corp.
Sakai Display Products Corp said at a signing event with local officials in Guangzhou on Friday that the company's plant will be operational by 2019 and will be a so-called Gen-10.5 facility specializing in large-screen LCDs.
It said the plant will have capacity equating to 92 billion yuan a year.
To meet expected rising demand for large-screen televisions and monitors in Asia, the heavy investment is aimed at increasing production.
Apart from factory stoppages in Taiwan after an earthquake in March, the closure of a Samsung factory that accounted for 3 percent of the market resulted in a hit being taken by the global LCD output.
With production scheduled to begin in 2018, in December last year, China's largest LCD panel maker, BOE Technology Group, began construction on its own Gen-10.5 plant in Hefei.
It would begin construction on a 50 billion yuan LCD plant in Shenzhen, Shenzhen China Optoelectronics Technology Co, a subsidiary of TCL Corp, announced in May.
Investing a total of 15.1 billion yuan in the company, Hon Hai seeks to turn the joint venture into a subsidiary, and Sakai Display Products Corp's plans for the Guangzhou plant come amidst such a situation.
Giving Hon Hai a 53 percent interest in the business and lowering Sharp’s stake from to 26 percent from 40 percent, the venture will also sell 436,000 shares for 17.1 billion yuan to an investment co-owned by Hon Hai Chairman Terry Gou.
Depicting the region as an  “investment treasure land” amid calls to move tech manufacturing to the U.S., Foxconn Technology Group founder Terry Gou said his company plans to build an $8.8 billion television flat-panel factory in Guangzhou, China.
With technology from Sahpr Corp., the Japanese electronics brand acquired this year by Foxconn, the new factory will make advanced liquid-crystal displays. The manufacturing environment in China, where the Taiwanese company makes Apple Inc.’s iPhones and other products, was praised in a speech announcing the deal by Mr. Gou.
As a means to encourage more manufacturing in the U.S., President-elect Donald Trump has called to impose 45% tariffs on goods made in China and Gou’s comments came amid such calls by the U.S. President-elect.
Trump or his tariff proposals were not directly referred to by Gou. Gou’s remarks Friday suggest Foxconn remains committed to manufacturing in China, where it has most of its assembly lines even as previously, Foxconn officials said they were considering increasing their investments in the U.S.
Saying that it isn’t a “manufacturing power country” like China, Gou made a pointed comparison with India, which has hopes to become a center for iPhone production.
As he sought better investment terms, holding talks with different countries or municipalities, Foxconn’s founder has in the past played governments off each other. He ultimately has only invested in one.
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