Taiwan's Hon Hai Precision Industry Co, better known by its trade name, Foxconn, is to buy majority stake in a Hitachi Ltd display unit for about $1.2 billion, making it the world's top-ranked maker of small and medium-sized LCDs, Nikkei Business Daily said Monday.

The venture, Hitachi Displays Ltd, will channel the funds into the building of a new factory in Japan that will supply Hon Hai, one of the biggest manufacturers of Apple's iPhone and iPad, it said.

After its recent acquisition of Taiwanese LCD panel maker Chimei Innolux Corp, Hon Hai will become the world's top maker of smaller LCD panels with a market share of 17.3 percent, outstripping Sharp Corp, according to 2009 data.

Hitachi declined to confirm the report on its subsidiary, according to AFP, with a spokeswoman saying, "The company is seeking measures to strengthen its operations."