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Sharp looks to re-enter American TV market this year

Foxconn's US factory plans prompt U-turn in brand strategy

Sharp has been trying to reclaim the rights to use its TV brand in the U.S. after selling them to China's Hisense in 2016.
Sharp has been trying to reclaim the rights to use its TV brand in the U.S. after selling them to China's Hisense in 2016.   © Reuters

OSAKA -- Sharp seeks to resume marketing its own-brand televisions in North America as soon as this year, a change of strategy driven by the U.S. production plans of its Taiwanese parent, iPhone assembler Hon Hai Precision Industry.

Financial troubles drove the Osaka-based electronics maker to abandon the North American market -- the world's largest after China -- and sell the rights to its Sharp and Aquos brand TVs to Chinese peer Hisense for five years starting in 2016.

The parties are now negotiating toward having Sharp restart production of high-end TVs, such as those with ultra-high-definition 8K displays or screens bigger than 55 inches, while leaving the mass-market small and midsize models to Hisense.

Hon Hai, the contract manufacturer better known as Foxconn, aims to produce TVs at a plant to be built in the U.S. state of Wisconsin that will supply its own liquid crystal displays.

Chairman Terry Gou became one of the first corporate executives to heed U.S. President Donald Trump's calls to make goods on American soil when he announced plans for the factory in July 2017. The president has been invited to the factory's groundbreaking ceremony, scheduled for Thursday.

Sharp's 8K TVs form a key piece of Foxconn's growth strategy. The company aims to build "a robust 8K plus 5G ecosystem in the United States," Gou said in last July's announcement at the White House, referring to the so-called fifth generation of fast mobile data networks. The plant is to supply Sharp TVs for sale in the U.S. market.

Foxconn's 2016 acquisition of Sharp brought a reversal of earlier cost-cutting moves by the Japanese manufacturer, whose hefty domestic investments in LCD production had backfired. The company began trying to wrest its brand rights back from Hisense, suing the Chinese company in U.S. court last year for allegedly infringing its brand.

Sharp later dropped all the lawsuits and began negotiating with Hisense to seek a path back into the North American market. The Chinese company's acquisition in February of Toshiba's TV business appears to have helped ease its stance toward a resolution.

Sharp sold more than 10 million LCD TVs in fiscal 2017, roughly double the year-earlier figure, driven by its re-entry into the European market and growth in China. Access to Foxconn's supply chain helped lower costs and deliver Sharp's first net profit in four years. 

North American shipments of flat-panel TVs will reach 43 million this year, estimates U.K.-based research firm IHS Markit.

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