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October 09, 2012

Japan's NEC Sells LCD Panel Patent To Taiwan's Hon Hai

To secure additional revenue, Japan’s leading flat-panel manufacturer NEC (News - Alert) Corp. has decided to sell a liquid-crystal display (LCD) panel patent to Taiwan's Hon Hai Precision Industry Co. for 9.45 billion yen (US $120.69 million).The Taiwanese electronics manufacturer plans to use the patent for LCD displays of personal computers and mobile phones.

According to a report, Hon Hai produces smartphones and other consumer appliances for companies such as Apple (News - Alert) and others, and is expected to utilize the patent for its production of smartphones and LCD televisions.

Hon Hai chairman Terry Gou visited NEC headquarters in Tokyo in August. During his visit to NEC, Gou told reporters that the two companies have agreed on the LCD patent transaction deal.

Meanwhile, Hon Hai has also been talking to financially struggling Japanese electronics manufacturer Sharp (News - Alert). Hon Hai plans to invest in Sharp’s LCD business. In fact, as a potential investor, the report indicates that Hon Hai would like Sharp to spin-off its LCD panel business. And the Taiwanese company would purchase a 9.9 percent stake in Sharp’s LCD business. However, such a deal is on indefinite hold for the last several weeks.

Nevertheless, the report indicates that the two are moving on this front, and Hon Hai seems to be encouraging Sharp spin-off as a precondition to the investment, with the LCD business serving as a joint-venture between the two.

Sharp, however, is reluctant to lose control of its LCD business. The Japanese LCD maker feels that its LCD business will play a major role in its recovery. With 9.9 percent purchase of Sharp’s LCD business, Hon Hai would become the largest shareholder of the Japanese LCD unit.

Edited by Brooke Neuman

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