Chipmaker Qualcomm is set to buy about five percent of Sharp, reports
said on Tuesday, as the cash-strapped Japanese electronics giant looks
for a capital injection to repair its balance sheet.
The 10 billion
yen ($122 million) investment by US-based Qualcomm comes as Sharp, mired
in heavy losses, has also reportedly been talking with other US
technology giants, including Intel and Dell, about a possible
The Qualcomm deal would see the pair jointly develop
energy-efficient liquid crystal display panels for smartphones using the
Japanese firm's technology, with the US company getting new Sharp
shares equal to about five percent of its current market value, Jiji
Press news agency reported.
The agreement calls for Qualcomm to
invest about 5.0 billion yen in Sharp by the end of the year, with the
other half invested as the joint venture progresses, the leading Nikkei
business daily said.
News of the deal gave Sharp shares a boost in Tokyo where the embattled stock rose 1.74 percent to 175 yen by the morning break.
a short statement on Tuesday morning, Sharp said "today's reports about
a US chipmaker's investment in our company are not what we have
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 cuts while cutting wages for
employees from the factory floor to the executive boardroom and
selling real-estate to shore up its balance sheet.
year, Sharp said it had reached a capital injection deal worth about
$800 million with Taiwan's Hon Hai Precision, which makes Apple gadgets
in China, but the deal stalled as Sharp's share price nosedived.
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