Rumors of talks between Taiwanese contract maker Hon Hai Precision Industry, the parent company of Foxconn, have been confirmed by Hitachi's president on Tuesday. Hiroaki Nakanishi said Hitachi needs capital to expand in the LCD panel sector, and is in talks with Hon Hai and other companies, the Wall Street Journal reported on Tuesday. Foxconn's highest-profile customer is Apple for its iPads, iPhones and Macs.
Nakanishi said Foxconn's large client base is attractive in what is a volatile market, as it eliminates one of the major risks related to investing in increased production capacity.
No agreements were reached with Foxconn or any of the other partners Hitachi is talking with, though these were not identified.
If Hitachi and Foxconn enter into some sort of an agreement, they will become one of the largest suppliers of small and midsize LCD panels in the world, with a combined share of 15.5 percent of LCDs by shipment value.
The earlier rumor asserted that Foxconn was readying to buy a majority stake in Hitachi Displays for $1.2 billion. Hitachi would use this money to build a display factory in Japan that would produce small- and medium-sized screens for Foxconn's clients.