Foxconn-Sharp aimed at countering S. Korean LCD makers

The recent alliance between Taiwanese manufacturer Foxconn Technology Group and Japan's Sharp Corp. will likely present a counterweight to South Korean liquid crystal display (LCD) makers that have been dominant players in the global LCD market, an expert said Tuesday. Foxconn, the world's largest contract electronics maker, agreed with the Japanese electronics giant last week to establish a joint venture company in Taiwan. The new joint venture will be in charge of the LCD TV panel and component business. Further details, including when the firm will be set up, were not disclosed. Market researcher DisplaySearch said their move is seen as a strategic play against their South Korean rivals. "Sharp and Chimei Innolux Corp. had a combined LCD TV panel unit market share of 29.3 percent, which is greater than Samsung and LG Display," said David Hsieh, a vice president at DisplaySearch. "This means that the joint venture will be a major player in LCD TV panels." Chimei Innolux, a subsidiary of Foxconn Group, is the world's No. 3 LCD maker after Samsung Electronics Co. and LG Display Co., both from South Korea. Over the past decade, Taiwanese LCD panel makers have overtaken Japan in production capacity, but met tough competition from South Korean makers. Meanwhile, Japanese TV brands saw Samsung Electronics and LG Electronics Inc. take the top positions in the LCD TV market. "Within the leading TV brands, Korean makers like Samsung and LG have a clear strategy for in-house production...In the meantime, the exchange rate and business environment are putting pressure on Sharp to maintain in-house production, and Samsung and LG Electronics are aggressively expanding their global market shares," Hsieh said, adding that Sharp was an ideal customer for Foxconn. During past periods of LCD panel oversupply, Taiwanese makers became more vulnerable than Samsung and LG, which have their own end products with strong brands. Contract-based Taiwanese panel makers did not have demand as stable as what South Korean counterparts had, DisplaySearch explained. The research firm expected the latest agreement would be beneficial to both Foxconn and Sharp, strengthening their positions in their respective markets.