Hon Hai Precision (Foxconn) Chairman Pulls Power Play On Sharp, Delayed Manufacture of iPhone 5 Displays

Hon Hai Precision (Foxconn, from here on out) chairman, Terry Gou, is proving to be a shrewd negotiator, as Sharp is finding out. Sharp, which is saddled with debt and reportedly falling behind schedule producing displays for Apple's upcoming iPhone 5 device, is in talks with Foxconn to sell the Taiwanese firm a 9.9 percent stake in the company, but Gou will only agree to the partnership if he's given a management role with Sharp.

Gou was scheduled to meet with Sharp executives during a trip to Japan last week, but left the country without notice. It's a power play on his part, and he's making it abundantly clear that he has no intention of casting Foxconn in a role as venture capitalist.

Sharp Building

"If it was just a capital investment, why would I want it? Gou said. "Sharp can go and talk to its banks, or an investment company. It doesn't need [Foxconn] at all."

Should Foxconn ultimately decide to invest in Sharp, it would give the Taiwanese firm access to advanced flat screen technology and put it in a better position to remain the primary supplier of Apple products. Sharp, meanwhile, needs an infusion of cash to pay all or part of its debt totaling 1.25 trillion yen. The proposed partnership would be considered a win-win for both companies, but as long as Foxconn has the upper hand, Gou apparently intends to use it.