There’s an end to the speculation about a tie-in between Qualcomm and Sharp after the Japanese technology company announced that it has agreed to a deal that will see Qualcomm provide 9.9 billion yen ($120 million) of investment to jointly develop its IGZO low-power display technology.
Reuters had earlier speculated that an agreement was a close, and now Sharp has confirmed that Qualcomm subsidiary Pixtronix is making the investment, which will see it combine its MEMs display technology with Sharp’s IGZO technology to develop a range of new products for devices of varying sizes and types.
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Sharp says that the two companies will “consider the possibility” of furthering their collaboration together using Qualcomm chipsets alongside the low-power MEMs/IGZO technology. That could have real implications for smartphones, given the chipset-maker’s reach in the industry.
The deal is seen as giving a huge boost to IGZO, which has already been used in Sharp products and is set to hit the market within rival phones from Q2 2013, and an opportunity to be produced for smaller devices, as the announcement explains.
“With this agreement, Sharp will accelerate its strategy for growth in small- to medium- sized LCD business with IGZO-based display technology as its core, and expand its revenue and corporate value.”
The 9.9 billion yen investment is almost double the figure that Reuters and Bloomberg reported. That’s likely to give Qualcomm a 5-10 percent share, and could make it Sharp’s largest shareholder.
The move is a huge endorsement for the Japanese company which has seen competition put it into a serious financial position. The lowering of its share price, and the dropping of its credit rating to junk, has seen talks with another potential investor — Chinese manufacturer Hon Hai, the parent firm of Foxconn — stall.
Rumors of a joint Intel-Qualcomm investment breathed life into Sharp’s shares — which rose 10 percent on the news — last month. With Qualcomm’s interest now confirmed with investment, shareholders and potential investors like Hon Hai have reason to believe there will be greater stability at the 100-year old company.
Sharp announced plans to cut 11,000 jobs in September and, later that month, it closed a key refinancing deal which provided $4.6 billion in loans. It announced a $350 million voluntary redundancy program in August, as part of earlier plans to layoff 5,000 employees, which saw 3,000 staff exit.
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