US-based Intel and Qualcomm are in talks to jointly i nvest about 30 billion yen (US$378 million) in debt-stricken Japanese consumer electronics maker Sharp Corp, two sources familiar with the matter said on Wednesday.
Details of the talks were not known, but Sharp, whose displays are used in Apple’s iPads and iPhones, is looking to small displays to spark a revival in its fortunes and sees the new generation of high-end laptops as a fresh market.
Intel, which has been promoting a new category of thin ”Ultrabook” laptops with touch screens, has long been interested in Sharp’s power-saving IGZO displays, as it responds to a shift from PCs to smartphones and tablets.
Sharp may reach an agreement as early as the end of this month with Qualcomm, said one of the sources, who asked not to be identified as they were not authorized to speak to the media, adding talks with Intel are less concrete amid the chipmaker’s unclear financial picture.
Shares in Sharp jumped 11 per cent on the news, but brokers said the rally was likely to be brief as the potential investment would do little to address the firm’s fundamental problems as it struggles with a TV business in retreat, aggressive competition and a US$13.8 billion debt load, according to Thomson Reuters data.
“Sharp has talked about cutting debt and inventory, but they haven’t made it clear how they plan to generate cash flow and strengthen their capital base,” said Toshiyuki Kanayama, senior market analyst at Monex Inc.
Japan’s top LCD maker has been in talks for months with Taiwan’s Hon Hai Precision Industry Co Ltd, which is considering becoming the century-old Japanese firm’s biggest shareholder, but has said it is looking at other alliances as well.