The Foxconn Group had held talks with a few Chinese flat panel makers, including Chongqing HKC Optoelectronics and China Star Optoelectronics Technology (CSOT), for possible sale of its new 10.5G line in Guangzhou but no deal was reached, according to sources from Taiwan's LCD supply chain.
The revelation comes after an earlier Reuters report saying that Foxconn was looking to sell its new US$8.8 billion display panel factory in Guangzhou amid waning demand for display products and intensifying US-China trade tensions.
The 10.5G line has just successfully rolled out its first verified 65-inch LCD panel, paving the way for the new fab to kick off commercial production at the end September or in early October, the sources indicated.
The 10.5G fab, Sakai SIO International Guangzhou, is a joint venture between the Guangzhou government and Japan's Sakai Display Products (SDP), a panel factory owned by Foxconn founder Terry Gou and Japan's flat panel maker Sharp. It is being built with a production capacity of 90,000 glass substrates sized 3,370 by 2,940mm a month and will focus on producing 65- and 75-inch and other ultra large-size TV panels.
Due to possible acquisition talks and concerns of supply glut in the display industry, the 10.5G line is expected to ramp up its capacity slowly, likely to start at 15,000-20,000 substrates a month initially before reaching full capacity in 2020, the sources estimated.
While declining to respond to market speculation, Foxconn stressed that it does not own Sakai SIO's 10.5G line and is unawre of its business.
Some market observers also noted that while talks for LCD fab transactions are quite common in the panel industry, the chances of successful sales are not high, especially for new factories in China, which might involve local governments' complicated subsidization policies.