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Foxconn acquires Sharp for US$ 6 billion, signals move to OLED market

Foxconn acquires Sharp for US$ 6 billion, signals move to OLED market

Feb 29, 2016: The global consumer electronics market is expected to grow at a CAGR of over 3% during 2015-2020, according to a report published on Research and Markets. The report states that the demand for consumer electronics in the Asia-Pacific region is expected to witness the highest growth, and today Japanese electronics company Sharp agreed to a US$ 6 billion takeover by Apple Inc. assembler Foxconn Technology Group.

Foxconn acquires Sharp for US$ 6 billion, signals move to OLED market

The deal is the largest acquisition of a Japanese technology company by an overseas buyer. Sharp have lost around $10 billion over the last five years as the price of LCDs has plunged, reporting a net loss of ¥24 billion last quarter. Innovation Network, backed by the Japanese government, previously purchased the LCD businesses of Toshiba, Hitachi and Sony, and had been favorites to reach a deal with Sharp.

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A recent report on the global LCD glass market had projected growth at a rate of 5.1% until 2020, with increased innovations in technology driving growth. LCD has been the main technology used in many devices, especially portable ones. This is due largely to the reduction in device size and size of display panels, and because the demand for high-quality display has been increasing. But the report does not that the market faces increased competition from alternative technologies.

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The global OLED display market is expected to grow at a CAGR of 18.7% over the same period, offering sharper images, better contrast ratios, crisp colors, and faster refresh rates than any existing display technology. According to reports, Apple plans to introduce OLED display into iPhones as early as next year but doesn’t want to rely on Samsung, who make 95% of the world’s OLED supply. This could create a potential opportunity for other display markers, like Sharp.

Source: Research and Markets

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