TAOYUAN, Taiwan -- Foxconn Technology Group is seeking to take over embattled Japanese conglomerate Sharp Corporation because the iPhone assembler needs Sharp's advanced display technology for its new panel plants in China, said David Hsieh, a senior director at research firm IHS DisplaySearch.

But Tokyo-backed investment fund Innovation Network Corporation of Japan, which is vying with Foxconn for control of Sharp, might use this a key argument for keeping the electronics maker in Japan and preventing its technology from being leaked to Chinese competitors.