Hon Hai to invest in Hitachi new panel plant

According to "Nihon Keizai Shimbun" reported on Monday, Taiwan's Hon Hai Precision Industry (2317) will spend 100 billion yen (1.2 billion U.S. dollars) to obtain a majority stake in Hitachi and Canon's joint venture LCD panel plant.

The Nikkei reported that Hitachi Displays Ltd., a joint venture between Hitachi and Canon Inc., is a small-to-medium-size LCD panel factory. It will use Hon Hai's funds to build a new plant in its production base in Chiba Prefecture. It is expected to start production in 2012. In the future, we will supply smart phones produced by Hon Hai.

After the new plant is put into production, it will more than double the annual production capacity of Hitachi Display. Hitachi’s holding of Hitachi Display will drop from the current 75.1% to 30%. Hitachi spokesperson said that the company has not made a decision on the investment case reported by Nikkei.

Hitachi Display ranked last in the global market for small and medium size LCD panels last year (2009), with a market share of 5.9%. If Hitachi Display and Hon Hai Investment's Chi Mei Electric Co., last year, accounted for 17.3% of the market share, surpassing Sharp, a small and medium-size LCD panel maker.