Foxconn Takes Control of Sharp for US$3.5 Billion

[ Bloomberg ] Pavel Alpeyev, Takashi Amano, and Shigeru Sato:

The parent of Hon Hai Precision Industry Co. is paying 389 billion yen ($3.5 billion) for a controlling stake in Sharp, a drop of 100 billion yen from an agreement forged a month ago. As a result, Foxconn and its affiliates will get 66 percent of the Japanese company for 88 yen per share, both companies said in statements on Wednesday.

Foxconn at the moment is a giant contract manufacturer of electronics products; Apple’s iPhones for example are built by Foxconn. Is Foxconn becoming a vertically integrated consumer electronics brand? That would be interesting.

The world’s CE brands outsource their manufacturing to companies like Foxconn. But what would happen if one of the largest contract manufacturers start to compete with the same CE brands they manufacture for? At half the price? Bloodshed.

Foxconn knows how to make things and make them well; think iPhone-level quality manufacturing, at half the price.

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