Intel Corp., the world’s largest maker of microprocessors for personal computers, and Qualcomm, the globe’s biggest supplier of system-on-chips for mobile electronics, plan to jointly invest as much as $378 million into display maker Sharp Corp. to guarantee stable supply of high-quality screens for various devices.
Intel is particularly interested in high-quality, energy-efficient IGZO displays for ultrabook computers that are produced by Sharp. Qualcomm needs stable supply of advanced displays for devices like smartphones and media tablets from different makers to guarantee rapid expansion of the mobile gadget market and its own predictable revenue growth.
Sharp, which market capitalization has decreased by three times this year, is expected to lose ¥450 billion ($5.7 billion) this fiscal year, which means it badly needs money to survive. As a result, the two chip companies are in talks to invest around ¥30 billion ($378 million) into Sharp, reports Reuters news-agency. Sharp received a guarantee for ¥360 billion in loans from its two main lenders, Bank of Tokyo-Mitsubishi UFJ and Mizuho Corporate Bank, in September. The loans are enough to sustain the company through its next financial year to March 2014.
Earlier this year Foxconn acquired a stake in Sharp and gained partial control of one of the world's leading LCD manufacturing facilities. As a result, Foxconn secured supply of liquid crystal displays used in mobile phones, personal computers, tablets, TVs and other popular devices. Thus, the company now needs to further expand production capacities to build even more devices for companies like Apple and others that use Foxconn's services.