Hon Hai To Invest JPY100 Billion In Hitachi LCD Unit
Taiwan-based Hon Hai Precision Industry Company is rumored to be planning to invest JPY100 billion, which is about USD1.2 billion, in Hitachi Displays Ltd., an LCD screen maker jointly owned by Japan's Hitachi Ltd. and Canon Inc.
According to reports in Japan's Nikkei, Hitachi Displays makes small- and medium-sized LCDs and it plans to use the investment to build a new factory in Japan. The factory is expected to start operation from 2012 and to provide products to Hon Hai's smartphones. With the new factory, Hitachi Displays' annual capacity will double. After the investment by Hon Hai, Hitachi's stake in its LCD unit will decrease from the current 75.1% to 30%. Hon Hai will make the investment through two JPY50 billion payments, one between March 2011 and March 2012, and one in the following year.
However, Atsushi Konno, spokesperson of Hitachi Group, said that Hitachi is constantly considering measures to strengthen its operations but will not comment on individual plans under consideration. Meanwhile, a Hon Hai spokesman said he had not heard about the reported deal.
Prior to this, Hon Hai also acquired the Taiwanese LCD panel maker Chimei Innolux Corp in May 2010. Nikkei revealed that in 2009, Hitachi Displays and Chimei jointly owned 17.3% share in the world's small- and medium-sized LCD panel market.