Kirk Yang of Barclays Capital, a bank, reckons it unlikely that Sharp will force Hon Hai to honour its original deal.

ECONOMIST: Sharp and Hon Hai

Like other manufacturers in China, Hon Hai faces rising labour costs, though it is better placed than most. (Mr Yang reckons that labour accounts for only 4.5% of the cost of goods sold.) A move up the value chain may help.

ECONOMIST: Hon Hai and Sharp