Foxconn to delay signing of Sharp takeover deal that will make it even more important to Apple

Foxconn is already recognised as Apple's biggest manufacturing supplier

Chinese workers in the Foxconn factory in Shenzhen, in southern China's Guangdong province. (Getty)

Foxconn, a Taiwanese technology company, is delaying signing a deal to take over struggling Japanese electronics company Sharp Corp because of terms that it wants to have clarified.

Foxconn beat a government-backed rival to win the deal, announced on Thursday, which marked the largest acquisition of a Japanese tech firm by a foreign company.

Foxconn is already recognised as Apple's biggest manufacturing supplier. By buying two-thirds of Sharp for a reported $6.2 billion, it will gain access to Sharp's liquid crystal displays, which may give it greater pricing power over Apple.

“Sharp has the technology to build out the components to compete with Samsung as an Apple supplier, which means that with Sharp under its umbrella Foxconn can help Apple wean itself off Samsung,” said Gavin Parry, managing director of Parry International Trading, a brokerage in Hong Kong.

The agreement will see Sharp start mass-producing organic light-emitting diode screens by 2018, around the time Apple is expected to adopt the next-generation displays for its iPhones.

Apple already has a significant stake in Sharp's LCD business, specifically related to a factory in Kameyama, Japan, dedicated entirely to the iPhone, according to Apple Insider.

But the Foxconn takeover, which was announced on Thursday, bolstered Foxconn's positions as Apple's biggest supplier.

Sharp's stock slid 14 per cent after it looked like shares in Sharp would be worth less than had been hoped after Foxconn acquired the company.

Foxconn said in a statement that it hoped to clear up the terms of the deal as soon as possible.

Additional reporting by Reuters