honhai
Latest
Foxconn investment in Sharp looking less likely due to LCD manufacturer's shrinking stock value
Foxconn's parent, Hon Hai Precision Industry, partnered up with Sharp earlier this year, taking a stake in Sharp's Sakai LCD manufacturing plant and investing another $850 million in the company. Unfortunately, that latter investment deal is in danger of dissolving due to Sharp's financial troubles. The Wall Street Journal reports that Sharp's shares have fallen enough in the months since the aforementioned agreement was consummated in March -- due to flagging sales and excess inventory -- that Sharp's given Hon Hai the option to back out of the deal. However, Hon Hai's still interested in buying ten percent of the Japanese company, and has expressed an interest in renegotiating the terms of the investment. So, it seems we'll have to wait and see if Sharp accepts Hon Hai's continued advances, but you can read more about the company's financial woes right now at the source below.
Foxconn to build new plant for iPhone screens with Sharp's help
Sharp and Hon Hai Precision, parent company of Foxconn, are partnering to improve the LCD manufacturing process for the iPhone. A report by Reuters points to Nikkei business daily report that says Sharp is helping Foxconn outfit a new Chengdu plant with the latest LCD manufacturing technology. Foxconn will use Sharp's know-how to improve its iPhone display manufacturing process. In return, Hon Hai, parent company of Foxconn, will buy an 11 percent stake in Sharp that's worth 66.9 billion yen (US$844 million as of this writing). This agreement follows an earlier deal that gave Hon Hai a 46.48 percent stake in a Sharp's most advanced LCD display plant in Sakai, Western Japan.
Sharp reportedly getting cozy with Hon Hai Precision, helping to make phone and tablet LCDs in Chengdu
If we believe Japan's Nikkei, the decision by Hon Hai Precision Industry (that is, Foxconn's daddy) to buy a stake in Sharp was really just the start of a long, torrid love affair in LCD production. While Hon Hai is getting the rosy side of the deal for Sharp's TV-oriented Sakai plant, it's now thought to be paying Sharp for display technology that would go into a new factory in Chengdu for small- and medium-sized LCDs used for smartphones and tablets. If all dovetails as nicely as the two would like, the joint venture would see advanced mobile displays manufactured on the cheap -- the best of both worlds. Suffice it to say that there's a few companies that might be interested, as clients like Apple are no strangers to Chengdu. Before you let visions of IGZO-based LCDs on every iPad and iPhone dance through your head, though, remember that neither Hon Hai nor Sharp has confirmed anything -- and that the plant wouldn't be up and running until 2013 at the earliest, even if everything's in sync.
Apple to seek new life for iPhone 3GS in emerging markets
The iPhone 3GS is still being sold in the US and other countries, but by the time the next-generation iPhone appears later this year the 3GS will be getting a little long in the tooth. Jefferies & Company analyst Peter Misek says that Apple has apparently signed a deal with a global distributor to sell the 3GS as a prepaid phone in emerging markets. In a note to clients, Misek didn't provide a lot of information but did say that he thinks the wholesale cost of the iPhone 3GS will drop from the current US$375 to $200 to $250. Jefferies has increased its estimates of iPhone sales for the quarter ending June 30, 2012. Misek doesn't believe that other Wall Street analysts are properly accounting for Hon Hai's (Foxconn) plant in Brazil, and thinks that Apple will manufacture between 28 and 30 million iPhones. The pessimists on The Street say that Apple's iPhone production will be about 2 million iPhones less than the range quoted by Jefferies & Company.
Report: Foxconn spending $210 million on Apple production line
China Daily is claiming that Foxconn will pump $210 million into building a production line in China's Jiangsu province. Local authorities have stated that the plant in Huai'an city will produce components for Apple, no doubt heralding a raft of rampant speculation as to Cupertino's intentions. The building will occupy 40,000 square meters, produce $1.1 billion worth of gear per year and require 35,800 employees -- more than Nokia and Sony have fired in recent months, combined.
Sharp posts $1.4 billion extraordinary loss, refocuses on mobile displays
Sharp has reported an extraordinary loss of 117.1 billion yen ($1.4 billion) for the financial year ending March 2012. The company has cited restructuring costs and inventory losses as the causes for the write-down, but also projected that its TV business would lose a further 18.7 percent of its projected sales in the current year. The company has decided to convert some of its big-screen LCD production lines into mobile LCDs as it tries to reassert its dwindling display business. It's yet more bad news after the company sold part of its LCD manufacturing business to Hon Hai, Sony withdrew from a joint venture and refused to deal with Sharp in the future, plus an 86 percent collapse in profits.
Apple supplier Hon Hai Precision Industry to "significantly" raise wages
Workers at Taiwanese plants run by Hon Hai Precision Industry -- the parent company of iPad and iPhone manufacturer Foxconn -- will begin to see some benefit of the popularity of the Apple products they manufacture in the form of "significantly" higher wages. The company is doing this primarily to attract and retain top talent at its Taiwanese manufacturing facilities. Foxconn has recently worked on improving worker conditions at plants in mainland China, raising wages and reducing the number of overtime hours worked by employees.
Sony and Sharp joint venture hits a rocky patch, Sony cuts off capital
When Sharp sold off some of its LCD manufacturing business to Hon Hai Precision we knew the company had fallen on tough times, we just didn't realize how bad things truly were. That joint venture it formed with Sony, well, it's all but over at this point. The two companies have amended their deal with each other and Sony has decided not to inject any more capital into the project. That's not entirely surprising since the relationship was already starting to show signs of strain, but the partnership could crumble at any moment. A study period has been designated, through the end of September, to decide what the future holds for the two regarding the production and purchase of large panel LCDs, but at any time Sony can simply demand that Sharp buy back its shares and leave the venture. For Sharp's sake, we certainly hope Hon Hai is in this for the long haul. Check out the legalese stuffed PR after the break.
Hon Hai Precision snaps up 10 percent of Sharp in display tie-up
For those unaware, going at it alone in the cutthroat display business isn't exactly a recommended business approach. To wit, Sharp -- once a mainstay in the LCD industry -- has just sold an approximate 10 percent stake of itself to Taiwan's Hon Hai Group. Sharp will be issuing new shares worth $808 million to Hon Hai Precision Industry Co., and we're told that it'll go down as the largest investment ever in a Japanese company by a Taiwanese one. Moreover, Hon Hai will grab half of Sharp's 92.96 percent stake in its LCD panel factory in Sakai, Japan. Though it may not be obvious, seeing Sharp accept this fate is hugely symbolic, and it's happening just as the company gets ready to eat "multibillion-dollar losses" for this fiscal year -- which just so happens to be the 100th anniversary of its founding. Sharp executive managing officer Takashi Okuda said this during a news conference in Tokyo: "We have tried to do everything by ourselves, but the environment is tough." Here's hoping for a better tomorrow, though.
Hon Hai sees profit fall nine percent in Q3, pins hopes on new Chinese factories
Hon Hai Precision Holdings has just released its Q3 earnings report, and it probably did so with a whimper. That's because net profits fell to NT$19.2 billion (about $614 million) this quarter, marking an 8.6 percent decline from Q3 2010, when Hon Hai (aka Foxconn) reported a net income of NT$21 billion (around $702 million). The company blamed the decline on a slow economic recovery and its ongoing expansion in China, where new factories are being constructed across inland areas like Chengdu, Wuhan and Zhengzhou. These costs are still taking a toll on Hon Hai's bottom line, though analysts say the expansion could pay off in the long-run, thanks to the lower wages that Hon Hai will have to pay to maintain operations in these less affluent regions. Some are also hopeful that the iPhone 4S will help spur production heading into Q4 of this year, though its ultimate effect, of course, remains to be seen. Hit up the links below for more details and analysis.
Report: Foxconn's Brazil factory ready for business, will begin shipping iPads in December
It appears that Apple is about to expand its manufacturing operations to Brazil, where a new Foxconn factory is already in place and ready to churn out iPads, according to a report from national media outlet UOL. Aolizio Mercadante, the country's minister of science and technology, confirmed the news this week during a hearing held by the Commission of Economic Affairs. "At first many doubted, but it will be the first time that [Apple] will produce iPads outside Chinese territory," Mercadente said. "We are taking a big step for digital inclusion in the country." Located in Jundiaí, the new facility was constructed under a joint venture between Foxconn and the Brazilian government, with the former reportedly contributing $12 million to the initiative. Rumors of a South American expansion began circulating earlier this year, with many expecting Foxconn's Brazil-based operations to get underway during Q1 of 2012, according to DigiTimes. Construction, however, appears to have wrapped up ahead of schedule, with Mercadante claiming that iPad shipments will begin in December. Apple, for its part, has not commented on the report.
Foxconn posts $943 million net profit for first half of 2011, 20 million iPad 2s coming for Q3?
It looks like 2011 is shaping up to be a solid year for Foxconn. Earlier this week, the hardware manufacturer announced net profits of NT$27.38 billion (about $943.72 million) for the first half of this year, just a few months after posting a disappointing $218 million loss for all of 2010. These figures, however, are down about 21 percent from the first six months of last year, when Foxconn (AKA Hon Hai Precision) reported net profits of NT$34.74 billion (around $1.2 billion). In a statement, Hon Hai said its first semester results were "as expected and remain seasonal," considering today's harsh and uncertain financial climate. DigiTimes, meanwhile, is reporting that the electronics maker is "expected" to ship a full 20 million new iPad 2s during the third quarter of this year, though the Taiwan-based news outlet didn't offer much in the way of explanation or sourcing.
Apple to release cheaper, 8GB iPhone 4 within weeks?
As the world waits for Apple to release the iPhone 5, Reuters is reporting that Cupertino may be refreshing the iPhone 4, as well. According to two anonymous sources "with knowledge of the matter," an unnamed Korean manufacturer has already begun producing parts for a cheaper, 8GB version of the smartphone, slated to launch within the next few weeks. As for that next-gen handset, the insiders went on to say that the iPhone 4S / iPhone 5 will feature a more spacious touchscreen, better antenna and eight megapixel shooter, and that Apple is indeed aiming for a late September launch, after having already asked manufacturers Hon Hai and Pegatron to prep their facilities for the production of 45 million units, altogether. Details, as usual, are still scarce at this point, but we'll let you know as soon as we get more information.
Hon Hai chairman Terry Gou says Apple products are "very difficult to make"
Hon Hai, parent company of Foxconn, is blaming Apple for its poor financial performance over the past two quarters. Chairman Terry Gou confirmed the Chinese company invested heavily in its manufacturing plants to keep up with Apple's demand. He said Apple devices were "very difficult" to make. The company's profit gains were also hit hard by Foxconn wage increases, which were introduced following a rash of employee suicides and negative reports over the past few years. Gou hopes to turn things around in the last half of the year when its investment in manufacturing and lucrative Apple contracts should begin to pay off.
Foxconn plant reopens, resumes operations following explosion
Foxconn confirmed today that its manufacturing plant in Chengdu, China has reopened and resumed operations following an explosion in its iPad 2 production facility last month that killed three employees and left others in hospital. The company has also announced that while its investigation into the incident is "ongoing," it has already addressed the preliminary finding that the explosion was "likely due to an explosion of aluminum dust in a ventilation duct." To that end, it says it has put in place "improvements in workshop ventilation," as well as a "a total revamping of the policies and practices related to the disposal of that dust." All Things D has the company's complete statement at the link below.
Foxconn owner reports revenue up thanks to iPad 2, other devices
Hon Hai Precision, the parent company of Foxconn, recorded an impressive revenue increase in its latest earnings report thanks to the iPad 2, the original iPad and the Kinect. According to the Taiwan Economic News, the manufacturing company reported revenue of NT$152.878 billion (about US$5.2 billion) in February 2011, up 25.81 percent year over year. This increase in revenue may offset some concerns over the slowed growth of the company. The iPad 2 has been immensely successful since its debut last week. Long lines characterized the launch, and Apple sold an estimated half million devices in the first weekend of sales. The iPad 2 is difficult to find in retail stores here in the US, and its online ship date is pushed out 4-5 weeks. [Via Boy Genius Report]
Yuanta Securities analysts claim iPad 2 will be delayed until June (Updated)
The iPad 2 may be delayed due to "production bottlenecks" at manufacturing company Hon Hai Precision, parent company of Foxconn. This delay is partially the result of unspecified changes in the iPad 2 design made by Apple before the Lunar New Year on February 3, according to a report from Yuanta Securities analysts Vincent Chen and Alison Chen. "Our checks suggest new issues are being encountered with the new production and it is taking time to resolve them," writes Chen. "As a number of Android 3.0 tablets are being launched in April and May, the delay in iPad 2 shipments may give the Android camp a brief window of opportunity." A two month delay would push the iPad launch close to Apple's Worldwide Developers Conference and the expected launch date of the iPhone 5. It is possible that Apple could tie the announcement and launch of the two iOS devices together, but the retail debut of two extremely popular devices at the same would be a logistical nightmare. A delay would also cut into analyst's forecast of 30.6 million iPad shipments for 2011, a figure that could drop to 23 million following a delay. We should note this latest report contradicts previous rumors that suggest the iPad 2 has entered production and is on track for a March release. Both the Wall Street Journal and Japanese website MacOtakara claim to have sources that confirm the iPad 2 is rolling off Asian production lines. According to Bloomberg, an Apple representative in Hong Kong declined to comment on this delay, and Hon Hai spokesperson Edmund Ding was not reachable. Update: The Loop chimed in with a rebuttal that claims this rumor is absolutely not true. And AllThingsD also claim the iPad 2 will be introduced during a March 2 event.
Hon Hai to expand retail chain, open 500 Apple licensed stores in Asia
A report out of Digitimes suggests that Cybermart, a retail arm of Hon Hai which also owns Foxconn, has recently received approval as an Apple-licensed retailer in the Asia-pacific region. The retailer intends to sell Apple products in up to 500 new stores planned for China, Hong Kong and Taiwan. Cybermart will open seven to eight stores in 2011, starting with its first store in Tianjin, China which will open on April 1, 2011. These retail stores will complement the 20 stores Apple is planning to open in China during 2011. While the Apple Stores will form the hub of company's Chinese operations, Cybermart's retail chain and household name will help Apple expand its presence in the growing Asian market. The retailer is known for its selection of electronics and aims to become China's top electronics chain. Apple is wisely eyeing the Asian market for explosive growth in 2011. In Apple's last quarter, Asian revenue is up 147% and could bring Apple up to $2 billion annually. The iPhone is also gaining in popularity with a 12% market share in Japan and over 20% post-paid share in South Korea.
Brazilian billionaire wants Apple manufacturing contract
AppleInsider reports that Brazilian billionare Eike Batista, who made his $27 billion fortune in the mining industry, is trying to convince Apple to have its products made in Brazil rather than by Foxconn in Shenzhen, China. He is currently constructing the Port of Acu in southern Brazil -- a $1.6 billion construction project -- encompassing 90 square miles of available space that he hopes will lure companies to Brazil for product assembly. If Apple doesn't bite, Mr. Batista says he is going to try to lure BMW to his new development instead. Apple has been using Foxconn as its product manufacturer for years, but a series of suicides by plant workers earlier this year lead to a cut in overtime hours and increased wages, which Apple itself was rumored (and Foxconn formally denied) to be subsidizing. Foxconn, part of Taiwan-based parent company Hon Hai, recently reported that it will be raising manufacturing prices, directly affecting Apple's costs. Not sure what that means for product prices next year, but Mr. Batista could be approaching Apple at a time it might be willing to talk about developing a new manufacturing plan. If that's the case, we wish him luck.
BusinessWeek profiles Foxconn founder (and veritable pitbull) Terry Gou
As you might imagine, becoming the dominant player in electronics component manufacturing in China -- particularly at a time when competition has never been fiercer -- takes a particular personality type, and after reading BusinessWeek's profile of Foxconn founder Terry Gou, you get a very real sense that the dude meets the criteria. His reaction to this year's factory suicide controversy is a bit unusual; he basically comes out and says that he didn't worry about the first few before realizing that he needed to make some changes somewhere around the fifth death, but given that he says he's been living in his office for a while now and eating three meals at his desk trying to make things right, it sounds like he's finally on top of it. The story of Foxconn's stratospheric rise is an interesting one, starting with its early coup making components for the Atari 2600 leading through to its purchase of 1,000 Fanuc milling robots generally reserved for prototyping -- valued at $20,000 apiece -- that it needed to buy to secure Apple's iPhone 4 contract. Gou envisions a fully-automated (and presumably almost employee-free) component factory inside of five years, has qualms about expanding his manufacturing presence in America ("I don't want to spend time having people sue me every day"), and pays executive bonuses out of his own dividends to protect the company's bottom line... so yeah, he's quite the industrialist. Follow the link for the fascinating full profile.
