Rumors of Sharp and Foxconn working together have been swirling since they made an agreement in March to partner up in order to advance LCD technology.
Now it seems the two companies are finally getting the ball rolling and are making plans to open a factory in Chengdu, China where new displays will be produced for the iPhone, according to a recent report from Japanese business newspaper Nikkei.
The publication stated that the Japanese division of Sharp will supply its technical knowledge to Taiwan's Hon Hai Precision industry company for a plant in China that will produce panels for the iPhone and other consumer electronics.
This project will be funded with tens of billions of yen and Sharp will be aiming to improve quality management at Hon Hai's planned plant in Chengdu, according to the publication.
Apple has been working towards securing its relationships with component creators and suppliers such as Foxconn and Sharp in order to be able to move more quickly and efficient in including the latest technology into its electronics.
Sharp was originally given the assignment to create the Retina displays for the third-generation iPad, but could not meet Apple's deadlines due to quality control issues. The company ended up being shut out of the initial batch of devices. Samsung and LG then became the main suppliers.
However, Sharp has recently joined in with the other two companies and is now shipping its displays for the new iPad.
Apple's next generation iPhone is expected to launch in the fall of this year, so this factory will more than likely be used for Apple's next batch of devices such as the fourth-generation iPad, and seventh-generation iPhone.