Is Sharp/Foxconn/Hon Hai making progress on their Gen 10.5 fab?
Back in late December 2016, Foxconn (2354.TT) announced it had decided to build an $8.8b LCD production fab in Guangzhou, China. The fab, which would be built under the auspices of Sharp, a Foxconn affiliate, was to be completed in 2019 and was to focus on producing 8K ultra large TV panels. Little has been said about the progress of the fab, and we noted that we had heard that negotiations with the local Guangzhou government had bogged down last September, likely delaying the start-up date.
While not directly related to the Foxconn fab, we note that Corning (GLW) Display Technology Guangzhou recently completed its registration process for active company status in the Zengcheng District of Guangzhou. The Corning project, which we estimate will cost ~$300m will likely supply the new Foxconn/Sharp fab when it is completed, and will be constructed simultaneously with the new display fab. While we don’t have fresh information as to the status of the Foxconn/Sharp fab, the notion that primary suppliers are registering local corporations as suppliers is a good sign.
Our October update on the fab plans, despite the site manager’s disagreement, stated that we had pushed back our expectations for the fabs start-up to the end of 2019, and we still believe that is a realistic expectation, given the size of the project shell. If construction were to begin tomorrow, we would expect 14 to 16 months to completion and another 6 months for infrastructure, equipment delivery, and production tuning. Chinese construction crews do take schedules quite seriously and if they are able to meet more aggressive goals, the original September target could be met, but for now, even with the encouraging signs that major suppliers are moving forward, we remain convinced that year-end 2019 is most likely.
While not directly related to the Foxconn fab, we note that Corning (GLW) Display Technology Guangzhou recently completed its registration process for active company status in the Zengcheng District of Guangzhou. The Corning project, which we estimate will cost ~$300m will likely supply the new Foxconn/Sharp fab when it is completed, and will be constructed simultaneously with the new display fab. While we don’t have fresh information as to the status of the Foxconn/Sharp fab, the notion that primary suppliers are registering local corporations as suppliers is a good sign.
Our October update on the fab plans, despite the site manager’s disagreement, stated that we had pushed back our expectations for the fabs start-up to the end of 2019, and we still believe that is a realistic expectation, given the size of the project shell. If construction were to begin tomorrow, we would expect 14 to 16 months to completion and another 6 months for infrastructure, equipment delivery, and production tuning. Chinese construction crews do take schedules quite seriously and if they are able to meet more aggressive goals, the original September target could be met, but for now, even with the encouraging signs that major suppliers are moving forward, we remain convinced that year-end 2019 is most likely.
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