Chip manufacturer Qualcomm has agreed to invest up to $120 million in struggling Japanese firm Sharp, with the two companies planning to work together to develop low-power displays for mobile devices.
Qualcomm will invest half of that amount by 27 December, with the remaining $60 million depending on the success of their joint research. After the initial investment, Qualcomm will become Sharp’s sixth largest shareholder, and its largest investor that is not a financial firm.
The deal will see Sharp work together with Qualcomm subsidiary Pixtronix to further develop its MEMS (microelectromechanical system) display technology. The colour display technology consumes as little as 1% the power of an LCD, and requires lower voltage levels to maintain its imagery.
Qualcomm has pitched the technology as falling between current LCD and e-paper screens in terms of screen quality and power usage. The company said it will work to combine it with Sharp’s IGZO (indium gallium zinc oxide) screen technology, a separate low-power display technology that Sharp has used in its own recent phones and tablets, with the companies aiming to commercialise the new displays and build them using existing LCD factories.
"We are going to have a feasibility study at around hopefully March of next year. We will decide whether to do stage two, that would be whether we move to development," said Sharp spokeswoman Miyuki Nakayama, referring to the possible second round of investment from Qualcomm.
The deal does not affect ongoing discussions between Sharp and Foxconn Electronics parent Hon Hai Precision Industry over a separate investment that was put on hold earlier this year after Sharp’s shares plunged in value. Hon Hai has already invested about US$800 million in Sharp to take a share in one of its Japanese factories to produce large LCD screens, which the companies now operate jointly.
Media reports have also said Sharp is in discussions with other companies, including Intel, though it has not publically commented on those. In the midst of a restructuring, the company is on track for a US$5.6 billion loss this year, mortgaging key properties and cutting employee numbers.
"We are certainly open to new possibilities, given our difficult position," Nakayama said.
IDG News Service
Subscribers 0
Fans 0
Followers 0
Followers