Foxconn to Close Inefficient Units at Sharp
June 22 2016 - 9:50AM
Dow Jones News
TAIPEI—Foxconn Technology Group plans to close inefficient
subsidiaries at Sharp Corp. after completing its $3.5 billion
acquisition of the unprofitable Japanese electronics maker.
Terry Gou, Foxconn's founder and chairman, said at the Taiwanese
company's annual shareholder meeting Wednesday that he also plans
to accelerate commercialization of Sharp's patents to help turn the
business profitable.
"Sharp has lots of technology but it isn't able to market it,"
he said. "Turning patents to technology, then turning technology to
products, that's what we are good at."
Foxconn, formally known as Hon Hai Precision Industry Co., is
the world's largest electronics contract manufacturer and a key
supplier for Apple Inc. and other major brands.
Mr. Gou said Foxconn has completed legal aspects of the takeover
and new management will oversee Sharp starting next month.
Foxconn plans to close some of Sharp's redundant and inefficient
overseas operations, including some sales joint ventures, Mr. Gou
said.
"Sharp has too many subsidiaries, which results in too much
overhead," he said.
Foxconn posted in May a 9.2% decline in first-quarter net profit
to 27.58 billion New Taiwan dollars ($848.2 million), as growth
slowed in the global smartphone market.
Mr. Gou said Tuesday that the company faced challenging market
conditions, including a trend of growing protectionism in many
countries.
Write to Eva Dou at eva.dou@wsj.com
(END) Dow Jones Newswires
June 22, 2016 09:35 ET (13:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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