Taiwan-based LED packaging house Harvatek has announced the termination of joint venture with China-based TV brand TCL. Harvatek noted that both parties have had disagreements on some terms, and after careful consideration, the firm decided to transfer its 50% stake in the joint venture to TCL. Harvatek stated that during the two years of the project, Harvatek invested around CNY15 million (US$2.44 million).
Harvatek signed a joint venture agreement with TCL through its subsidiary, Honor Light Limited, on June 24, 2011, to set up an LED packaging plant in Guangdong province, China. Each party owned 50% stakes. Originally, the plant was set to have an annual capacity of two billion units, and operations were scheduled to begin in March 2012. However, after the agreement announcement, rumors regarding a suspension of the plans started circulating. Harvatek never confirmed the rumors.
Industry sources disclosed that in 2010-2011, many Taiwan- and China-based firms cooperated through joint ventures. However, due to the economic downturn and market oversupply, many investment projects have been halted. In addition, there have been rumors stating that TCL is very strict with cost control and suppliers usually have small profit margins. This may also be the reason Harvatek quit the joint venture.
