The boards of Foxconn and Sharp yesterday approved a takeover plan valued at USD3.5 billion.
Through its subsidiaries, Innolux and Century, Foxconn is a leading supplier of thin film transistor liquid crystal displays (TFT LCDs). It is already the largest component supplier, systems integrator and subcontract manufacturer for many of the world’s leading brands.
The convergence of Foxconn’s business with Sharp’s TFT LCD business and other innovative developments, such as active-matrix organic light-emitting diode (AMOLED) and larger TV displays, creates a powerhouse with the largest TFT LCD production capacity and research capabilities in the world.
IHS Technology Views
Foxconn Group’s takeover deal means it acquires all of Sharp’s TFT LCD business. This allows Foxconn to strategically consolidate all of the existing display operations and future research development with an aim to compete with other display makers from South Korea, Taiwan and China, as they all race towards capturing a larger share in other lucrative segments, such as smart homes, robotics, Internet of Things (IoT), and smart cars.
Foxconn’s Innolux subsidiary is already in the process of increasing its production capacity with the building of its Gen 8.6 TFT LCD fab in Taiwan. In addition, Foxconn is building three Gen 6 low temperature poly-silicon (LTPS) TFT LCD fabs in Taiwan and China. These fabs are expected to be completed and operational within the next two years. With the acquisition of Sharp, which is currently the leading LCD maker, particularly in high resolution LTPS TFT LCD smartphone displays, low-power oxide TFT LCD tablet PC displays, and a-Si based TFT LCD automotive displays, Foxconn is eager to make considerable investment in building an AMOLED fab for flexible smartphone displays.
In terms of TFT LCD production capacity, the new company will account for 21% of the global capacity in 2016, surpassing LG Display, Samsung Display and BOE, according to IHS Display Supply Demand & Equipment Tracker (see graph below). And the new company will remain its leading position in terms of production capacity for the next couple of years, even despite aggressive capacity expansion plans from many Chinese LCD suppliers.
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