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Foxconn unit Innolux steers clear of US production bandwagon

Taiwan display maker expects good year in shadow of America-bound sibling Sharp

Innolux does not plan to answer Trump's call for manufacturers to set up shop in the U.S. (Photo by Cheng Ting-fang)

TAIPEI -- Major Taiwanese panel maker Innolux has no intention of joining parent company Hon Hai Precision Industry, better known as Foxconn Technology Group, in investing in the U.S.

"Within the Foxconn group, 'Make in USA' is a Sharp initiative," Innolux Chairman Wang Jyh-chau told analysts during an earnings call on Friday. "Innolux is not allocating its capex to U.S. manufacturing."

Wang's statement came as Foxconn and Sharp, its Japanese subsidiary, prepare to invest in a $7 billion facility for large display panels in the U.S. This coincides with new U.S. President Donald Trump's push to bring manufacturing back to his country.

The Nikkei reported on Friday that the new plant may be built in the state of Pennsylvania. 

On the panel front, Foxconn has been injecting most of its resources into Sharp since it acquired the Japanese conglomerate last August. But Innolux appears to be faring just fine on its own for now.

Innolux executives on Friday noted that there will be only a small increase in global production of large TV panels this year. This means supplies will remain tight in 2017 and bodes well for the company's outlook.

"Our executives all have high expectations for this year," Wang said.

The same day, Innolux reported a net profit of 10.86 billion New Taiwan dollars ($350 million) for the three months through December. It lost NT$6.7 billion during the same quarter of 2015.

Revenue for the October-December period came to NT$89.38 billion, up 9.7% on the year thanks to the limited supply of large panels. 

Still, Innolux's overall results for 2016 were hurt by tougher competition from Chinese rivals, along with a major earthquake in southern Taiwan that disrupted its production at the beginning of the year.

Innolux's full-year net profit dropped 82.7% to NT$1.87 billion, on revenue of NT$287.08 billion, down 21.2%.

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