Samsung throws 10.4b yen lifeline to Sharp in push for OLED technology

The investment by Samsung Electronics in struggling television-maker Sharp signals the South Korean company is accelerating a shift towards higher-end sets using OLED technology as it tries to widen the gap with rival Sony.

Samsung, the world's top seller of televisions, will acquire 3 per cent of Sharp for 10.4 billion yen (HK$856.8 million) to secure liquid crystal displays for smartphones and televisions. It is emphasising organic light-emitting diode technology that offers sharper, brighter images while consuming less power.

The firm, with 37.4 trillion won (HK$265.5 billion) of cash, is investing in OLEDs to boost sales of the ultra-thin sets that typically cost three times more than LCD models. Samsung and Korean rival LG Electronics are depending on the new technology to counter slowing global demand for televisions.

"Samsung is reducing its LCD production and shifting its focus more to OLED technology," said Kim Sung-in, an analyst at Kiwoom Securities. "LCDs aren't making big money anymore."

It is paying 290 yen a share for its stake in Sharp, or 15 per cent less than Wednesday's closing price. The share sale will close on March 28, according to the filing.

Foxconn Technology would continue talks with Sharp on a proposed investment, the Taiwanese electronics maker said.

Sharp, which makes screens for Apple's iPhones and iPads, would use 6.9 billion yen of the proceeds to buy new LCD technologies and 3.23 billion yen for capital expenditure related to mobile devices, it said.