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>> Sharp shuts down the factory and uses the foundry 21th,August,2018
Recently, Sharp Corporation announced that it will shut down its eight-end factory (located in Yao, Osaka) at the end of September 2019 to stop producing white goods in Japan. In the future, we will transform overseas production, such as the parent company Hon Hai Precision Industrial Production Base, to increase cost competitiveness. In addition, LCD TV production at the Tochigi Plant (Yaba City, Tochigi Prefecture) will also stop in 2018.
Dai Zhengwu said that the closure of the factory is to consider cost competitiveness issues to further increase the global market share.
Made in Japan fell under the altar
In the 1980s, Japanese electronic products began to flourish in China. Until today, Japanese manufacturing has been praised for its fine and rigorous reputation. And Sony, Panasonic, Toshiba, Sharp, Toyota and other brands have become synonymous with durable and reliable Japanese manufacturing.
However, in recent years, these Japanese famous companies have stepped down from the altar. Toshiba could not continue to sell its flash memory business because of its insolvency. Panasonic, Sony, Sanyo, Toshiba and other companies have fallen into a quagmire of losses and sales. Sharp was also at a loss before Foxconn's acquisition.
In 2017, with the help of Foxconn, Sharp achieved signs of recovery in the market through low-cost operation and low price, and finally turned losses into profit after four years. Of course, this is closely related to the substantial price increase of the panel in the past and the price change of Sharp. However, Sharp's practice of overdrafting the market through price cuts is not a long-term solution. With the weak global TV sales, China's LCD panel factory continues to expand its production capacity, causing LCD panels to fall into oversupply and increasing the risk of falling prices.
This time, Foxconn led Sharp's closure of its production plant in Japan, which is to continuously reduce its own operating costs and solve the space and ability to participate in market competition in the future. It also reflects the loss of advantages and market shrinkage in Japan's home appliance manufacturing under the global industrial chain competition, and the situation is difficult to reverse.
Sharp shuts down the factory and uses the foundry
The same is true. With the increasingly fierce competition in the global market, Sharp's production equipment is aging, labor costs are high, and innovation efficiency is becoming more and more prominent. The competitiveness is gradually declining, and it is impossible to compete with Chinese and Korean companies such as Haier, Midea and Samsung. In the field of home appliances, the glory of Japanese manufacturing and Japanese brands has belonged to the past, and it has gradually lost in the global market and emerging forces such as Chinese manufacturing, which forced them to re- rationally plan the industrial chain layout and optimize industrial structure adaptation. Competition needs.
Although Japanese home appliances are difficult to counterattack in the consumer market in a short time, the hats of Chinese home appliances relying on scale and price are not completely removed. The transformation and upgrading of the manufacturing system is concentrated only on the head brand, and a large number of core technologies in the upstream industry still hold Japan, South Korea, etc. In the hands of enterprises, such as Foxconn, the upstream control of the TV industry is constantly tightening.
Based on the first-mover advantage of how to improve manufacturing costs in China, it is inevitable to accelerate the occupation of the high-end market and accelerate the layout of the core industries such as panels and chips in the upstream industry. This will be the next round of competition in China. The road.
Foxconn accelerates Sharp's strategic transformation
From the large-scale price reduction promotion of the black TV set to the ice-washing of Baidian, the products have stopped production in Japan and have been turned to low-cost manufacturing in other parts of the country, thus reducing operating costs.
Since being accepted into Foxconn in 2016, Sharp has made a series of changes. Although the performance has recovered rapidly, Foxconn's strategic change to the Sharp brand's “noble and expensive” has also caused a lot of controversy. At the same time, under the strategy of Hon Hai to explore the transformation of home appliances, Sharp is also accelerating the restructuring, this time to shift to overseas production in order to reduce costs.
For Sharp, this is a big step in strategic transformation. In the past few years, Sharp has been in a quagmire of losses. In 2014 and 2015, the losses amounted to 222.3 billion yen and 255.9 billion yen respectively. As a result, Sharp’s insolvency was forced to be acquired by Hon Hai in 2016.
After being acquired by Foxconn, Sharp bid farewell to the high-end market positioning in the TV business, and adopted a "low-price" development strategy, which also achieved a good record. After the profit in FY2017, Sharp’s net profit increased by 32.6% year-on-year in the second quarter of this year, and it has to be said that it has achieved certain results.
Sharp shuts down the factory and uses the foundry
As a subsidiary of Foxconn, Sharp is inevitable to close its production facilities in Japan in order to maintain profitability and reduce operating costs. After all, for Foxconn, Sharp's Japanese manufacturing is becoming increasingly weak, and more importantly, it maintains continued profitability.
For Foxconn itself, in fact, it has been working hard to transform, trying to get rid of the current situation of relying too much on the foundry business, after all, the profit of the foundry business is too low, and its big customer Apple has been trying to introduce more foundries and Foxconn's competition to lower the foundry price, its acquisition of Sharp is one of the transformation methods, hope to improve their own technology, industrial chain strength, while developing their own brand business.
After the closure of the Japanese factory in the future, Sharp's home appliance orders can be handed over to other overseas production sites of the Foxconn Group. Due to lower manufacturing costs and transportation costs overseas, it will also bring greater profit margins, reduce costs and increase product price competitiveness. It seems that this is a good deal.
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