Foxconn solidifies pivot to OBM with Guangzhou government deal

Foxconn recently inked a deal with the Guangzhou Municipal government to build an 8k LCD panel production park in the city’s Zengchen District, signaling its intention to monetize the technology and brand strength after its takeover of Japanese electronics firm Sharp last year.

Under the deal, Foxconn will invest 61 billion RMB in the 10.5-generation 8k LCD panel production park (in Chinese) via its subsidiary Sakai Display Production (SDP). The production park is expected to start mass production in 2019, with output value estimated at around 92 billion RMB per annum once the production reaches capacity.

In January, Foxconn reported its first annual revenue decline since it listed in 1991. Its revenue dropped 2.81 percent from a year earlier to US$ 136.38 billion for 2016 (in Chinese), dragged down by declining orders for Apple’s iPhone 7. As a major contract manufacturer of the U.S. smartphone maker,  Foxconn derived more than 50 percent of its operating revenue from Apple.

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