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Foxconn shares jump after Gou's White House visit

On 7-day winning streak, iPhone assembler's stock closing in on NT$100

HONG KONG -- Taiwan-listed shares of key iPhone assembler Hon Hai Precision Industry, also known as Foxconn Technology Group, surged to a year-to-date high, following media reports that Chairman Terry Gou visited the White House.

The Nikkei Asian Review in the wee hours of Friday morning Japan time reported that a meeting between Gou and U.S. President Donald Trump would take place. Afterward, various news organizations, including The Washington Post and Taiwanese cable news station TVBS carried news of Gou's White House visit.

The visit came on Thursday evening U.S. time.

The Nikkei Asian Review's initial report sparked investor expectations that Foxconn is about to acquire the memory chip business of troubled Japanese electronics company Toshiba. Foxconn shares jumped to a year-to-date high at 99.50 New Taiwan dollars on Friday morning in Taipei, approaching the NT$100 mark for the first time since September 2014.

The surge in expectations came even though Gou, when asked whether he directly met with Trump, told the Washington Post: "My memory is not good; maybe I already forgot." The company, who bought Japanese icon Sharp last year, has been showing keen interests in buying Toshiba's chip business. It is vying for the unit with Western Digital, Broadcom and SK Hynix.

Gou likely visited Washington to also show his company's commitment to the U.S. economy. After Trump took office in January, thanks to his "America First" campaign, the Taiwanese executive said Foxconn is considering building a highly automated TV panel facility in the country.

Meanwhile, some investors question how much visiting the White House might be able to help Foxconn in its push for Toshiba's chip business. "Even if Gou has directly met with President Trump, it does not automatically increase Foxconn's chances of acquiring the Toshiba unit," said William Lo Chi Wai, at Ample Capital.

Foxconn shares have been on a winning streak, riding expectations for the next iteration of the iPhone, to be released in the second half of 2017.

Nikkei staff writer Mariko Tai in Hong Kong contributed to this story.

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