Hon Hai's Guangzhou Zengcheng panel factory is trying its best to find buyers, and the mass production plan may be suspended

Foreign media quoted a Japanese panel equipment supplier as saying that it has suspended shipments to the panel factory in Zengcheng, Guangzhou, China, which is invested by Foxconn founder Terry Gou. The main reason is that the factory is looking for buyers. In other words, the original mass production plan of the Zengcheng factory may be suspended.

Foxconn's Guangzhou Zengcheng panel factory turned on its first 65-inch panel product on August 1 this year and was originally expected to start mass production at the end of September.

In recent years, due to the overcapacity of panel production and the difficulty in resolving the trade war, SDP is said to be reconsidering not manufacturing panels in China. There are even reports that the sale price of the Guangzhou Zengcheng plant will be US$8.8 billion, and that it has contacted investment banks, but has not yet determined the buyer.

Looking back at the origin of the factory's establishment, Terry Gou was optimistic about panels as an important strategic material. On December 30, 2016, Sakai Display Production (SDP), in which he personally invested, and the Guangzhou Municipal Government jointly signed the "10.5-generation display full-ecological industrial park construction project cooperation framework agreement". The two parties agreed to invest RMB 61 billion in Zengcheng, Guangzhou, to build a 10.5-generation display full-ecological industrial park with the world's highest yield and production capacity.

According to the plan at that time, the relevant project was laid in March 2017, and the main plant building was capped in June 2018. The designed production capacity is 90,000 glass substrates per month (glass substrate size is 3370mm x 2940mm), and the main production is 65-inch and 75-inch products. Indium Gallium Zinc Oxide technology will be introduced, and mass production is expected to start in 2019, with an estimated annual output value of RMB 92 billion.

According to exclusive information previously obtained by "Core Technology", the biggest factor in SDP's decision to sell the factory is that the market competition is fierce, it is difficult to win orders, and it is difficult to support the factory's operating capital needs, so there is a plan to sell the factory.

However, the Zengcheng plant in Guangzhou is currently facing a dilemma. In the past, most cases of panel factories selling factories included orders and equipment as a package transaction. However, the Zengcheng plant has not yet entered mass production and has no orders. In addition, the specifications of the 10.5-generation line are different from the previous old generations. Whether the manufacturer that takes over has relevant management experience and technology is a big problem.