Why does Foxconn want to strangle Samsung?

According to Korean media reports, Sharp notified Samsung last week that it would stop cooperating and supply LCD panels starting next year. This is the first major move by Taiwan's Foxconn after acquiring Sharp. Why does Foxconn want to strangle Samsung? Doesn't Samsung have its own screens? Why is it controlled by others?

Samsung and Foxconn's feud

This news came as a surprise to the industry, as Samsung has always been the main user of a LCD panel factory jointly owned by Foxconn and Sharp. Half of the factory's annual output of 10 million LCD panels is supplied to Samsung, which is about 10% of Samsung's total TV production capacity. This means that after the cancellation of the partnership, half of the subsidiary's revenue will be affected.

A few years ago, when Sharp was in financial trouble, Samsung Electronics invested in it and acquired about 3% of its shares. As a shareholder, Samsung also obtained a supply guarantee for LCD panels. However, with the change of Sharp's ownership, the relationship between Sharp and Samsung is bound to change.

According to Nikkei News, in September this year, due to Foxconn's successful acquisition of Sharp, Samsung Electronics has sold all of its shares in Sharp.

After Foxconn executives took over Sharp's business, they also said that Japanese electronics companies should unite with Taiwanese manufacturers to jointly deal with Korean companies such as Samsung and LG.

According to media reports, during the acquisition negotiations between Foxconn and Sharp, Samsung Electronics once considered bidding, if not a full acquisition, then to acquire the most valuable LCD assets. However, the strong-willed Terry Gou did not allow Samsung to acquire any valuable assets.

Why is Samsung controlled by others?

Because of its advancement in OLED in recent years, Samsung has been selling off its LCD assets, including production lines. For example, in February this year, Samsung sold its fifth-generation LCD panel line to a Chinese company for $50.88 million. However, at this stage, Samsung's main sales products are still LEDs, and Samsung's future OLEDs are unlikely to quench its thirst.

According to other sources, Samsung is now trying to contact LGD, hoping that the latter will take over Sharp's supply gap, but considering the feud between the two Korean giants, it is unclear whether they can successfully achieve a win-win cooperation.

The battle of the screen determines the future of life and death!

  Industry analysts said that Foxconn's strangling of Samsung was seen as a heavy blow from Terry Gou, who had vowed to "bring down Samsung", and Sharp's suspension of panel supply was intended to attack and contain Samsung. It is reported that Samsung had asked Sharp to withdraw its decision to suspend panel supply, and Terry Gou responded to Samsung's request with a high profile, "Then raise the panel price by 2 times (i.e. 1 time)".

It is reported that Gou's response surprised Samsung, and it was heard that the Samsung Group believed that "Chairman Gou took irrational measures." Samsung also inquired about the possibility of supplying panels to Taiwanese panel manufacturers such as Innolux, but was rejected, saying that "the contract for next year has already been signed." In addition, although the Samsung Group also negotiated compliance measures, it could not find a solution, so it may eventually have to rely on its long-term competitor LGD to supply panels.

In 2017, China's color TV industry has come to a crossroads: quantum dots or OLED? Sharp's shortage of products to Samsung is definitely not an impulse of Terry Gou. On the one hand, Sharp can increase the selling price by "forcing the palace". On the other hand, it also implies that Sharp, which has been acquired by Foxconn, will have a new transformation. Perhaps it will reorganize the Sharp brand and focus on building its own TV terminals.

Samsung is in a state of weakness at the moment. Its screens are its source of both success and failure.

Today, Samsung is making every effort to develop new technologies for the future, with considerable investments in both quantum dots and OLED. 2017 is the year when Samsung and other screen giants decide the direction of the Long March, and it is also the year when major giants in China's color TV industry decide the direction.

Now LG and Skyworth are mainly promoting OLED, TCL is mainly promoting quantum dots, and other brands such as Hisense, Changhong, and Konka are either OLED or quantum dots. There is not much time left for major brands to vacillate, otherwise they will lose the market opportunity.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.