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Foxconn unit Hon Teng shares jump after new venture targets booming autonomous car market

The joint venture with Japan’s Sharp to make cameras and mirrors is the latest step in Foxconn’s expansion into the growing market for autonomous vehicles

PUBLISHED : Thursday, 08 February, 2018, 4:17pm
UPDATED : Tuesday, 03 July, 2018, 8:22pm

Shares of FIT Hon Teng broke a three-day losing streak in Hong Kong on Thursday after the company, a unit of Foxconn Technology, the world’s biggest contract electronics maker, said it had formed a joint venture with Japan’s Sharp to make components for self-driving cars.

Hon Teng’s shares rose as much as 4.8 per cent to an intraday high of HK$4.40 on Thursday before closing up 3.6 per cent at HK$4.35, reversing their 16 per cent slump over the past three days.

The company said the venture with Sharp – which Foxconn bought in August 2016 for US$3.8 billion – would make automotive cameras and electronic mirrors. It will be based in Singapore.

The venture represents the latest foray by the Foxconn group into the booming market for autonomous cars. Last year, a study by chip maker Intel and research firm Strategy Analytics predicted the market for driverless vehicles would reach US$800 billion in 2035 and US$7 trillion by 2050.

“Automobile manufacturers are already equipping their products with advanced driver assistance systems, of which automotive cameras and electronic mirrors are indispensable hardware components, ” Foxconn said in a statement.

FIT Hon Teng will invest 1.541 billion yen (US$14 million) for a 51 per cent stake in the venture, while Sharp will commit 1.481 billion yen for the rest.

Foxconn, also known as Hon Hai Precision Industry, last week led a US$348 million funding round with Chinese internet firm Alibaba Group Holding in Xiaopeng Motors, a Chinese start-up that develops autonomous driving systems, internet connectivity and electric cars.

Terry Gou, chairman of Foxconn, has repeatedly stressed his interest in autonomous vehicles in his efforts to transform the contract manufacturer into a tech powerhouse.

Last December, Foxconn announced it planned to use autonomous vehicles to move workers in its US$10 billion LCD panel manufacturing plant in Wisconsin in the US, the first use of such vehicles in the state.

In August, Gou said the company would build an R&D centre in Michigan focused on developing automotive driving technologies.

Alibaba, operator of the world’s biggest e-commerce platforms, is the owner of the South China Morning Post.

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