Tag: Foxconn

Foxconn out of running for Toshiba business

Taiwan’s Foxconn, the world’s largest contract electronics maker, is not a favoured bidder for Toshiba memory chip business because it is too close to China.

Apparently the Japanese government has told Tosh that flogging its flash business to China  would be opposed because it means the transference of key technology.

Foxconn has plants in China, and the Japanese fear that putting the tech close to the Chinese would result in the tech leaking out due to industrial espionage and internal corruption.

Toshiba, the second-biggest NAND chip producer after Samsung, wants to sell the majority – or all – of its marquee flash-memory chip business, as it seeks to make up for a $6.3 billion writedown from its US nuclear unit Westinghouse.

Toshiba is valuing its chip business at $13.1 billion, people familiar with the matter have said. Initial bids are due by the end of the month.

Foxconn said last week it was “definitely bidding” for Toshiba’s chip business and that it was “very confident” it could buy into it.

Yesterday the Nikkei business daily reported that Foxconn has approached   SK Hynix to explore a joint bid.

TSMC, another Taiwanese firm and the world’s largest contract chipmaker, is also deeply interested in Toshiba’s chip unit.

 

Sharp sees first profit in two years

sharp2Sharp posted its first quarterly net profit in over two years as the Japanese LCD maker pressed ahead with cost-cutting measures under its new Foxconn owners.

Sharp raised its operating profit forecast to $329.85 million for the year ending in March from an earlier forecast of $227 million.

Net profit was $37,136,400 for October-December, compared with a $218,348,000 loss in the same period a year earlier. It was the first profit on a net basis since July-September 2014.

The return to profit comes as Sharp uses Foxconn’s mighty parts procurement power, reviewed the lineup of products and implemented various measures to cut fixed costs.

Sharp also benefited as production cutbacks by Korean rivals in LCD panels for television sets fuelled an industry-wide shortage of panels and pushed up market prices.

Its core display device unit posted an operating profit of 11 billion yen, against a 11 billion yen loss a year prior, swinging back to profit for the first time in two years.

 

Foxconn will build in the US

huet_fox_chickenFoxconn is considering setting up a display making plant in the United States in an investment that will cost $7 billion.

Company chairman and chief executive Terry Gou said the move was to attempt to get around US President Donald (Prince of Orange) Trump’s planned protectionism and a trend for politics to underpin economic development.

Foxconn’s proposal to build a display plant, which would be planned with its Sharp unit, will depend on many factors, such as investment conditions, that would have to be negotiated at the U.S. state and federal levels, Gou said.

Gou said that Foxconn had been considering such a move for years but the issue came up when Foxconn business partner Masayoshi Son, head of Japan’s SoftBank talked to Gou before a December meeting Son had with Trump.

Son pledged a $50 billion of investment in the United States and inadvertently disclosed information showing Foxconn’s logo and an unspecified additional $7 billion investment. At the time, Foxconn issued a brief statement saying it was in preliminary discussions to expand its U.S. operations, without elaborating.

The United States has no panel-making industry but it is the second-largest market for televisions. An investment for a display plant would exceed $7 billion and could create about 30,000-50,000 jobs.

“I thought it was a private conversation, but then the next morning it was exposed,” Gou said. “There is such a plan, but it is not a promise. It is a wish.”

This is also a long way from manufacturing iPhones in the US.

If any deal goes ahead it will likely not provide many US jobs either. Foxconn is keen on creating heavily robotised plants with limited human staff.

Sharp rethinks foreign brand licensing deals

sharp2Troubled Japanese telly maker Sharp is having a rethink of its  TV brand licensing deals overseas in an effort to boost its global presence now it is ruled by the glorious Foxconn empire.

In a statement the company said it had decided to review our current brand licensing business in Europe and Americas, and are currently examining various possibilities.

The comment follows a report by the Yomiuri newspaper that Sharp will dispatch officials next month for negotiations to buy back its TV business in the United States and Europe.

Sharp effectively exited the money-losing TV business in those markets and licensed its brand to China’s Hisense Group in the Americas and to Universal Media Corp Slovakia in Europe.

The withdrawal from the money-losing TV business abroad helped Sharp trim its losses in April-June.

But Sharp now believes that it can make profits out of the TV business by taking advantage of Foxconn’s procurement power in the supply chain and its vast network of clients, the Yomiuri said.

 

Wintel: smartphones continue to crash

Microsoft campusMicrosoft is expected to lay off nearly 2,000 people after its disastrous acquisition of Nokia’s smartphone business as it dawns on the software giant that it’s never going to make headway in the market.

Both Microsoft and Intel seriously believed at one time that they could stitch up the smartphone business as effectively as they controlled the PC business at one time.

But the hard fact that both firms are beginning to recognise is that they haven’t a snowball in hell’s chance of gaining a grip on this sector of the IT market.

Microsoft’s latest announcement today that it will lay off 1,850 people follows an Intel announcement just a few weeks back that it would lay off 11 percent of people to make ends meet.

The giants have taken a while to wake up to the uncomfortable fact that neither of them really matter in the slightest in an industry dominated by cheap chips and better products.

Microsoft bought Nokia’s smartphone business for a colossal $7.2 billion just two years ago and last year cut nearly 8,000 jobs.

The latest job cuts will come in Finland and the $950 million it writes off today will mean it has to pay nearly a quarter of that sum in redundancy payments.

Last week Microsoft said it would sell off a chunk of its phone business to a division of Taiwanese manufacturing giant Foxconn.

Nokia gets back in the phone business

nokia-in-advanced-talks-to-acquire-alcatel-lucents-wireless-business-reportsFormer rubber boot maker Nokia is back in the mobile phone and tablet business after flogging its previous loss making empire to Microsoft which trashed it.

Nokia has announced plans that will see the Nokia brand return to the mobile phone and tablet markets on a global basis. Under a strategic agreement covering branding rights and intellectual property licensing, Nokia Technologies will grant HMD global Oy (HMD), a newly founded company based in Finland, an exclusive global licence to create Nokia-branded mobile phones and tablets for the next ten years.

Under the agreement, Nokia Technologies will receive royalty payments from HMD for sales of Nokia-branded mobile products, covering both brand and intellectual property rights.

HMD will provide a focused, independent home for a full range of Nokia-branded feature phones, smartphones and tablets. HMD has conditionally agreed to acquire from Microsoft the rights to use the Nokia brand on feature phones, and certain related design rights.

These agreements would make HMD the sole global licensee for all types of Nokia-branded mobile phones and tablets.

Apparently HMD intends to invest over $500 million over the next three years to support the global marketing of Nokia-branded mobile phones and tablets, funded via its investors and profits from the acquired feature phone business.

HMD’s new smartphone and tablet portfolio will be based on Android, uniting one of the world’s iconic mobile brands with the leading mobile operating system and app development community.

FIH Mobile Limited (FIH), a Foxconn subsidiary has bought the remainder of Microsoft’s feature phone business assets, including manufacturing, sales and distribution. HMD and Nokia Technologies have signed an agreement with FIH to establish a collaboration framework to support the building of a global business for Nokia-branded mobile phones and tablets.

This agreement will give HMD full operational control of sales, marketing and distribution of Nokia-branded mobile phones and tablets, with exclusive access to the pre-eminent global sales and distribution network to be acquired from Microsoft by FIH, access to FIH’s world-leading device manufacturing, supply chain and engineering capabilities, and to its growing suite of proprietary mobile technologies and components.

Nokia will provide HMD with branding rights and cellular standard essential patent licenses in return for royalty payments, but will not be making a financial investment or holding equity in HMD.

HMD’s new CEO will be Arto Nummela who previously held senior positions at Nokia and is currently the head of Microsoft’s Mobile Devices business for Greater Asia, Middle East and Africa and Microsoft’s global Feature Phones business. HMD’s president will be Florian Seiche, who is currently Senior Vice President for Europe Sales and Marketing at Microsoft Mobile, and previously held key roles at Nokia, HTC and other global brands.

Sharp and Foxconn deal will go through

sharp2Sharp and Foxconn are set to sign a takeover deal next week after repeated delays.

Word on the street is that the two sides are set to agree on a smaller bailout than originally planned for the troubled Japanese outfit.

The two companies will hold board meetings on Wednesday to approve the deal and officially sign a deal the following day.  Of course both sides are officially saying nothing.

The companies were close to signing a deal last month but Foxconn hit the pause button after discovering there were some liabilities that no one had warned it about before.

The deal is set to be the largest acquisition by a foreign company in Japan’s insular technology sector.

The Tame Apple Press is focusing on the fact that it will boost Foxconn’s position as Apple’s main contract manufacturer and provide Sharp with funds to start mass-producing organic light-emitting diode (OLED) screens by 2018, around the time Apple will claim to have invented the technology for its iPhones.

 

Sharp and Foxconn are in the War of the Roses

WarRoses1989Foxconn and Sharp,  which are supposed to be tying the knot, are already feuding like the divorcing couple in the War of the Roses.

The pair have been eyeing each other up since Foxconn founder and billionaire Terry Gou pulled out of a planned capital tie-up and strategic partnership with Sharp in 2012.

But it got silly last week. Sharp’s board met and announced a decision to sell a two-thirds stake to the Taiwanese group which upset Gou.

On the eve of that board meeting, Foxconn had asked Sharp to delay voting on a deal as it had just received “new material information” from Sharp that it hadn’t seen before and needed to clarify.

However Sharp appears to have ignored Foxconn and agreed to the deal anyway. To make matters worse it then made the deal public.

The information Foxconn was worried about was $2.66 billion in contingent liabilities at Sharp. The list was pulled together by working level officials at Sharp and forwarded, without top officials seeing it, to Foxconn as a goodwill gesture to make the buyer aware of worst-case scenario risks.

Foxconn said it “felt violated” and Gou shouted at his team for not having discovered these liabilities in the first place.

The mood has calmed again after the two companies’ CEOs met in China to clear the air. They have now agreed to extend a deadline for the takeover talks by a week or two, reflecting the importance of a deal estimated to be worth nearly $6 billion.

The suspicion appears to be based on distrust from four years ago, when Foxconn agreed to take a stake in Sharp. Then, Sharp warned of losses, and Foxconn walked away. Sharp shares sank 74 percent over the next seven months.

Gou personally bought a stake in Sharp’s LCD TV panel plant in Osaka, and some at Sharp credit him with improving operations there. He then presented a takeover plan on January 30 which could save Sharp.

However there is still some doubts whether Hon Hai will really keep its promise and there are doubts if Taiwan can respect the Japanese way of doing business. After all the traditional way does seem to get rather a lot of debts in this case.

Foxconn and Sharp deal already in trouble

sharp2Hours after it was announced, Foxconn’s plans to buy Sharp are already in trouble.

Sharp CEO Kozo Takahashi and Foxconn Chief Executive Terry Gou plan to meet today after the world’s largest contract maker of electronic goods put its takeover of the loss-making Japanese firm on hold.

Apparently the problem was previously undisclosed liabilities which Foxconn discovered when the deal went through. Foxconn said it would not sign the deal until it had clarified some “new material information” from Sharp. It did not elaborate.

One of the sources said Foxconn’s own due diligence had uncovered liabilities

A spokesman for Foxconn declined to comment on the issue. Sharp also declined to comment.

But the entire deal is in trouble according to analysts.

Shares in Sharp slid 15 percent this morning, adding to losses a day earlier as planned share dilution under the deal looked larger than expected. The stock has fallen 27 percent over the past two days.

The last minute hitch casts doubt on a deal that would have marked the conclusion to five years of courting by Gou and the opening up of Japan’s insular tech sector to foreign investment.

 

Foxconn buying Sharp for $5 billion

sharp2Foxconn is now only awaiting finalised details between the two parties, before buying the troubled Japanese display maker Sharp.

Foxconn’s lead zookeeper CEO Terry Gou said Foxconn has been given preferred negotiating rights, and is aiming to lock up a deal by the end of February.

The two companies are said to have reached a consensus on most matters, with what’s remaining being mostly legal and regulatory issues.

“The rest is a process…I don’t see a problem completing this process,” Gou said.

Sharp’s CEO Kozo Takahashi had previously denied that his company had given Foxconn exclusive negotiating rights. It’s not clear what changed to sway the situation.

Foxconn’s bid is believed to be worth at least $5 billion twice what the Japanese government was offering.

The Tame Apple Press thinks that if the Sharp deal is completed, it should further strengthen Foxconn’s links with Apple, giving it the ability to not just assemble Apple products like the iPhone but manufacture displays too. However it is unlikely that Foxconn would want to depend much more on Apple’s slowly failing business, it is more likely that it wants to take a bigger slice of smartphone and other mobile gadget production.