Foxconn Has Denied Any Plans of Selling the Guangzhou Panel plant

Foxconn Has Denied Any Plans of Selling the Guangzhou Panel plant

Hon Hai Precision Industry Corporation, an electronics manufacturing company based in Taiwan, said on Friday that it had no information regarding the media report which had said that the company was seeking to sell a huge flat-panel plant that was in Guangzhou, China.

Hon Hai, also known as Foxconn in a statement said that the company did not own the Chinese based panel plant and so was unclear about its possible disposal.

Hon Hai had to issue the statement after a report that was released earlier in the day said that the company was exploring the option of selling its new 8.8 billion U.S. dollars flat panel factory based in Guangzhou.

According to the report, Hon Hai has now started negotiations for appointing banks in order to find a buyer for their Guangzhou plant, which is still under construction.

The report said Hon Hai is seeking to dispose of the Guangzhou plant as demand for screens has been impacted by escalating trade friction between the United States and China, which “has disrupted technology global supply chains in a major way, forcing Foxconn to review its own.”

On Thursday, the President of United States, Donald Trump tweeted that Washington would impose a ten percent punitive tariff on additional 300 billion U.S. dollars worth of Chinese goods. The tariff will be effective from September 1st. This announcement has exacerbated the global trade turmoil.

The report shows that the industry of global flat panel has been struggling because of a supply glut and the tumbling earnings at the time of weakening sales of smart phone and TV, whereas the trade spats could boost the prices of the product that would further hurt the demand.

The report further added that the talks regarding the disposal plan are still in the initial phase and there has not been any agreement on the price tag.