Taipei, May 7 (CNA) Hon Hai Precision Industry Co., the main manufacturer of Apple Inc. products, denied a report saying that its China-based subsidiary, Foxconn International Holdings, would form a mobile phone joint venture with Japan's Sharp Corp.
Chinese website Sina Corp. reported earlier in the day that Foxconn International Holdings, the world's biggest contract manufacturer of cell phones, plans to set up a joint venture in China with Sharp, aiming to tap into the mobile market through the Japanese company's brand name.
Hon Hai clarified that the news was "groundless" and that it would maintain its strong relationships with branded customers.
"Our group has formed close partnerships with a lot of brand vendors to optimize the division of labor in the supply chain, and our group's business model of not having our own brand has never changed," Hon Hai said in a filing to the Taiwan Stock Exchange.
The report came after Hon Hai announced in late March its acquisition of a roughly 10 percent stake in Sharp for US$800 million (NT$23.4 billion), which made it the Japanese company's largest shareholder.
Under the deal, Hon Hai and its chairman Terry Gou also agreed to acquire a 46.5 percent stake in a 10th generation LCD plant in Sakai for an additional US$800 million.
The acquisition is expected to allow Hon Hai to not only own half of the Sharp plant's production but also participate in the Japanese company's future technology development.
(By Jeffrey Wu)