Looks like the state funded Innovation Fund might come to the rescue of Sharp and have made a formal takeover offer for it of $300B yen after Foxconn ( Taiwan company ) made an offer of close to $600B yen. Sharp management are looking favourably at the Innovation Fund offer because it's means the technology stays in Japan and they would rather support an ailing or potentially dying company as a) letting it go into the hands of a foreign raider let alone the Chinese is against their culture and b) they don't assess everything based on a bottom line ( eg profits ) they see the interconnectivity between everything ( eg technology, suppliers, creditors, workers/employment, national interest etc. ).
My limited understanding is that Foxconn want to get to Sharp because of the display screen tech. - LCD panels. Foxconn makes many of the components of the IPhone except the display screens and their most important client Apple have to source this from other suppliers like LG and Samsung ( who are actually their competitors ). A deal between Foxconn and Apple would mean Foxconn would get most of Apple's business and that Apple wouldn't have to source products and pay money to it's competitors. Apple shares are up 5% in last 2 days.
Even if you leave aside the merits of whether bailing our Sharp is a good or bad decision or whether they'll eventually sell out to Foxconn who have been after them for years now, I certainly do admire the Japanese stance. They don't roll over and submit and they're not going to make it easy for Foxconn. Worse case scenario for the Japanese is a Foxconn takeover would include protection for their workers, suppliers and creditors.
It made me wonder for a second or two what we do here in Australia and why we are so obsessed with this non-protectionist stance. Then I remembered that we do nothing, we sellout under pressure all the time and use either one of two spin theories to deflect criticism for our weakness. The first one is businesses need to stand on their own feet. When we axed our Innovation fund in 2014 , Joe Hockey said that “Businesses should stand or fall on their ability to produce goods and services that people actually want”. The same type of thing was said when we got rid of the automobile manufacturing industry. The second spin theory is a little less opaque and basically ties in two arguments in that (a ) their simply is not enough capital in Australia for this type of business and at least it will be saved and provide some form of benefit to us ( eg taxes, some workers retained ) or (b) this is what happens in a free trade world.
Anyway, I don't believe every business and industry should be saved. However, a lot of other countries have a far greater level of protectionism in their culture and some of them are not economic powerhouses like Japan and it doesn't seem to hurt them. I just think we should draw the line in the sand a lot closer to ourselves than it currently is. Maybe it's further away depends upon how you think.
Separate item - study come out that suggests our brain memory is actually ten times larger than what we thought and maybe holds one petabyte of data. Which is equivalent to the whole entire internet. I know they're not talking about my memory because these days it works on a few gig limit.
Well I managed to make a big deal about nothing. Occupied myself for an hour while watching the US market which is always beneficial.
