THE takeover bid by Hon Hai of Taiwan for Sharp, a chronically loss-making Japanese electronics firm, is being watched closely as a test of Japan’s openness to foreign investment. But it is also being scrutinised back in Taiwan. The deal may yet falter: as The Economist went to press, Hon Hai was reportedly seeking to knock around $900m off its earlier offer of $5.4 billion including assumed debt. But if it does go ahead, and Terry Gou, Hon Hai’s boss, succeeds in absorbing Sharp’s brand and technology, he will be able to offer his big customers, such as Apple, a broader array of parts, and may even transform his firm into a seller of innovative consumer goods. The deal could serve as a model for other Taiwanese electronics firms which want to go global, says the island’s economics minister, John Deng.
Electronics firms together contribute 40% of Taiwanese exports, and 15% of its GDP. For more than two decades they have achieved great success assembling computers and other gadgets for Western companies. At first their factories were all in Taiwan, but as China opened up, they shifted some to the mainland. The combination of...Continue reading
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