Dec 16, 2016: With the ambitious plan to capture a greater pie of the global TV market, Foxconn’s subsidiary Sharp will totally stop supplying LCD panels to Samsung Electronics from 2017. LCD panels are manufactured by Sakai Display in Osaka, jointly operated by Foxconn and Sharp.
With Sharp’s decision to halt LCD supplies, Samsung will face shortage of supply by about 4 million panels per year. LG Display will gain out of this development, as Samsung might approach the company to fill up the gap.
Foxconn & Sharp’s plans for 2017
After Foxconn acquired Sharp in August 2016, it has shifted its focus from mobile to TV market. From the beginning of 2017, Sharp and Foxconn will make strategic changes in their TV business. Their first step would be to discontinue Foxconn’s TV brand Infocus, and shift its resources to market Sharp’s TV brands, and boost its market position.
For 2017, Foxconn has also set a very ambitious shipment volume target of 20 million Sharp TV sets, which is about five times more than what it was in 2016. So, to meet this ambitious target, the group needs a continuous LCD panel supply. This also means that Foxconn is eyeing to capture about 10% of the global TV market.
Foxconn is also depending on its subsidiaries Sharp and Innolux to meet the large LCD panel supply demand. Foxconn may also use its facility in Nanjing, China, that makes liquid crystal modules (LCM), to help in integration and assembly of LCD panels. Innolux will also help in meeting this target.
According industry sources, due to these developments, Sharp must have projected a big price hike in first quarter of 2017, which has forced Samsung to turn to LG Display for panel orders.