Industryweek 3302 Sharp

Japan's Sharp to Get Cash Injection from Qualcomm

Dec. 4, 2012
Sharp has suffered a series of credit rating downgrades and warned it expects to lose about $5.6 billion in the fiscal year to March 2013.

TOKYO - Cash-strapped Japanese electronics giant Sharp (IW 1000/15) said Tuesday it had struck a capital injection deal with U.S.-based chipmaker Qualcomm (IW 500/77) as it moves to repair its tattered balance sheet.

The 9.9 billion yen ($121 million) investment follows earlier reports that Sharp, which is suffering heavy losses, has also been talking to other U.S. tech giants, including Intel (IW 500/26) and Dell (IW 500/20), about a possible investment.

The Qualcomm deal would see the pair jointly develop energy-efficient liquid crystal display (LCD) panels for smartphones using the Japanese firm's technology, with the U.S. company initially getting about 2.64% of Sharp's stock, based on 4.9 billion yen worth of shares.

The remainder of the investment would be paid as the joint venture progresses, Sharp said.

Sharp shares got a boost from earlier reports of the Qualcomm deal, with the embattled stock rising 1.16% to 174 yen in Tokyo on Tuesday.

"We positioned mid-sized and small LCD panels as our growth engine as we are competitive in that technology," Sharp said in a statement.

"The market for smartphones and tablets, the target for the mid-sized and small LCD panels, are expected to require higher picture quality and energy-efficiency as the market expands," it added.

Sharp has suffered a series of credit rating downgrades and warned it expects to lose about $5.6 billion in the fiscal year to March 2013.

The Osaka-based maker of Aquos brand electronics has announced thousands of job losses while cutting wages for employees -- from the factory floor to the executive boardroom -- and selling real-estate to shore up its balance sheet.

Earlier this year, Sharp said it had reached a capital injection deal worth about $800 million with Taiwan's Hon Hai Precision, which makes Apple (IW 500/9) gadgets in China, but the deal stalled as Sharp's share price nosedived.

Japan's battered electronics sector has suffered from a myriad of problems including a high yen, slowing demand in key export markets, fierce overseas competition and strategic mistakes that left its finances in ruins.

Copyright Agence France-Presse, 2012

Popular Sponsored Recommendations

Digitally Transforming Data and Processes With Product Lifecycle Management

Oct. 29, 2023
Manufacturers face increasing challenges in product development as they strive to consistently deliver improved results. Discover how industry leaders are improving time-to-market...

Beware Extreme Software

Sept. 24, 2023
As a manufacturer, you understand the importance of staying ahead of the curve and being proactive in your approach to technology. With the rapid pace of change in the industry...

How Manufacturers Can Optimize Operations with Weather Intelligence

Nov. 2, 2023
The bad news? Severe weather has emerged as one of the biggest threats to continuity and safety in manufacturing. The good news? The intelligence solutions that build weather ...

The Benefits of Continuous Thermal Monitoring

Oct. 17, 2023
Read this eBook to learn more about collecting and using data intelligently to improve performance.

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!