Can the Hon Hai deal resurrect Sharp Corp?
IT HAS become likely that Sharp Corp will be placed under the umbrella of Taiwan’s Hon Hai Precision Industry Co.
Hon Hai apparently aims to launch its own original-brand products by absorbing Sharp’s technology, even if it has to invest a vast sum of money. Sharp also has high hopes for turning around its performance.
However, Sharp – which has faced financial crises twice since 2012 – failed to reconstruct its management even after receiving a large amount of financial support. It is unclear whether Sharp will be revived with a Japan-Taiwan alliance.
“Unless we have confidence, we cannot invest such a vast sum of money,” said Hon Hai chairman Terry Gou, smiling as he spoke to reporters in front of Sharp’s head office in Osaka during a visit to Japan.
Through its high-value capital investment, Hon Hai intends to expand its businesses further by obtaining technology from Sharp, a world leader in liquid crystal panels, observers said.
In the field of home electronic appliances, Hon Hai expects to use Sharp’s planning and developing abilities to produce unique products. Gou stressed the merits of acquiring Sharp, saying, “If products are developed to be ‘smart’ [devices], we will be able to expand [our market] share.”
Hon Hai’s scenario for reviving Sharp is to restore investment for growth, which has virtually suspended due to financial difficulties. By utilizing its ample funds and substantial worldwide customer base, Hon Hai aims to boost Sharp.
Hon Hai has achieved rapid growth by manufacturing products for firms around the world, including Apple Inc of the United States. However, there are some signs of decline in its business. It is believed that it has been Gou’s long-cherished wish to produce products labelled with its own original brand. Obtaining the Sharp brand will be a big advantage for Hon Hai.
Meanwhile, Hon Hai is also appealing for Sharp. Not only is Hon Hai’s investment large, but the Taiwan firm’s proposal does not involve dividing Sharp’s businesses. By utilising Hon Hai’s customer base, Sharp can expect expanding sales of liquid crystal panels and other products.
However, some observers think it will not be easy to rebuild Sharp.
