Sharp holds Key to Foxconn's Restructuring

Look at that cute little guy.

Something interesting will come of this relationship.


Asia Nikkei

At a press conference in Taipei on Sunday, Foxconn Chairman Terry Gou boasted about Sharp's improved financial results and reiterated that the purpose of the takeover is vertical integration.

Gou has asked Sharp to increase the number of new products and strengthen its brand. He hopes that accomplishing these goals, coupled with Foxconn's cost competitiveness and finances, will lead to something like South Korea's Samsung Electronics.

That is what he means by vertical integration.

With Foxconn's growth as a contract electronics assembler now reaching its limit, the key to a structural overhaul is Sharp.

One of the earliest fruits of the integration could become visible in Shenzhen. On Jan. 19, Sharp opened a research and development center for home appliances in the southern Chinese city.

Shenzhen is Foxconn's main production base, and the company plans to further strengthen functions there to help develop products for its major clients, including Apple. The new Sharp center will be an addition to Foxconn's already sprawling Shenzhen ecosystem.