Taiwan-based manufacturing giant Hon Hai Precision Industry said on Monday it would not send a company representative to sit on the board of flat-panel maker Innolux Corp.
In a statement, Hon Hai, also known as Foxconn on the global markets, said its wholly-owned Hyield Venture Capital Co., which owns a 1.67 percent stake in Innolux, would not dispatch any representatives to the flat panel as board members.
Following the announcement, Hon Hai shares ticked up 0.48 percent to hit NT$104.50 while Innolux shares fell 0.74 percent to end at NT$13.35 on the Taiwan Stock Exchange Exchange Monday.
Innolux, which has proposed cutting its capital size by 9.5 percent to NT$95.564 billion (US$3.21 billion), has scheduled an annual general meeting for June 24 to elect new board members and vote on the capital reduction plan.
Currently, Hyield Venture Capital has two representatives — Yang Chu-hsiang (???) and Ting Chin-lung (???) — on Innolux’s board.
However, Hon Hai said that Yang and Ting, who have been renominated, would now represent themselves as individuals.
Despite Hon Hai founder Terry Gou (???) pouring substantial funds into the sector, Hon Hai emphasized that it only owned a minority share in Innolux and had not made significant investments in the flat-panel business.
According to Innolux’s 2021 annual report, Gou, Hyield Venture Capital and other Hon Hai affiliates collectively owned an almost 6.8 percent stake in Innolux.
Hon Hai said the company had laid out a clear business-development road map by placing the “3 plus 3” initiatives in focus.
The “3 plus 3” initiative refers to three emerging industries — electric vehicles (EVs), robotics, and digital health care — that are being developed through the application of artificial intelligence, semiconductor, and communication technologies. EVs have become the critical part of the initiative.
As part of this diversification, Hon Hai announced on May 12 that it has completed the purchase of a Lordstown Motors facility in Ohio and signed two manufacturing agreements with the embattled U.S. automaker.
According to Hon Hai, the deal is part of plans to establish Ohio as its first production hub for EV in North America.
In October 2021, Hon Hai unveiled three self-developed EV prototypes — the Model E passenger car, the Model C sports utility vehicle, and the Model T electric bus — under the MIH Consortium, an open-EV-development platform led by the company.
In the first quarter of 2022, Hon Hai’s net profit stood at NT$29.45 billion (US$988 million), down 34 percent from the roughly NT$44.40 billion seen in the fourth quarter of 2021.
However, on a year-over-year basis, Hon Hai’s first-quarter net profit rose 5 percent from NT$28.16 billion a year earlier.
Compared with the fourth quarter, Hon Hai’s first-quarter gross margin — the difference between revenue and cost of goods sold — moved lower to 6.02 percent from 6.03 percent, despite the first-quarter gross margin rising 0.22 percentage points from a year earlier.
Hon Hai Chairman Liu Young-way (???) had previously said that the firm was looking to take a 5 percent share of the global EV market through expected sales of NT$1 trillion by 2025.
Liu said that should the plan come to fruition, Hon Hai’s gross margin would be boosted by 10 percent.
Source: Focus Taiwan News Channel