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Report: Intel, Qualcomm to invest in Sharp

Posted: 16 Nov 2012 ?? ?Print Version ?Bookmark and Share

Keywords:LCD panel? bailout? IGZO displays?

Several news outlets have reported that IC giants Intel and Qualcomm are supposedly negotiating to invest in struggling Japanese CE firm Sharp.

The Kyodo News agency circulated that Intel and Qualcomm's planned investment will amount to as much as $500 million while Reuters said the joint financing would total about $378 million, citing unnamed sources familiar with the talks. Neither company have released official statements regarding the rumoured deal.

The investment by the world's largest CPU vendor and the leading mobile chip supplier is badly needed by Sharp, which is weighted down by an expected annual loss estimated at $5.6 billion. Sharp warned earlier this month that it may not be able to survive as an independent company. After announcing a massive quarterly loss on Nov. 1, the company acknowledged "serious negative operating cash flow."

Intel is said to be interested in Sharp's power-saving IGZO displays for its Ultrabook line.

Reuters reported that Sharp may reach an agreement as early as the end of November with Qualcomm, while "talks with Intel are less concrete amid the chip maker's unclear financial picture."

Other investors?

Sharp has been negotiating with Taiwan EMS behemoth Hon Hai for over a year. Those talks reached an impasse in August over what price Hon Hai would pay for acquiring a 9.9 per cent stake in Sharp. Earlier this month, Sharp president Takashi Okuda signalled that the company is also "considering other alliances."

Beyond Intel or Qualcomm, Apple, Google, Microsoft, Dell and Hewlett-Packard were reportedly approached by Sharp for financial help in exchange for access to Sharp's LCD technology.

Sharp's mounting problems stem from it massive investment on large-screen LCD panels for TVs. In hopes of catching Samsung, Sharp's top management sought to achieve economies of scale in its panel production. But TV market dropped just as the investments were made, especially in Japan.

Sharp's technologies include its IGZO (indium-gallium-zinc oxide) and in-cell technologies, which integrate touch sensors directly into LCD panels. The panel technologies were adopted by Apple in the new iPad and iPhone 5. Apple extended financial support to Sharp last year in remodeling a fab originally built to produce large-screen TV displays to produce screens for mobile devices.

Sharp missed the delivery date of new IGZO panels by nearly half a year. They were supposed to be designed into Apple's new iPad unveiled in March. Volume production of in-cell panels for Apple's iPhone 5 commenced at Sharp's Kameyama plant on the same day that Apple announced plans in September to release a new iPhone.

Sharp has lost three quarters of its value so far in 2012. It received a guarantee for 360 billion yen in loans from its two main lenders, Bank of Tokyo-Mitsubishi UFJ and Mizuho Corporate Bank, in September. The loans should sustain the company through its next financial year in March 2014.

- Junko Yoshida
??EE Times

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