Leading Japan-based display panel manufacturers, Sharp Corp., and U.S chipmaker, Qualcomm, have agreed to develop an energy-efficient, next-generation LCD panel for smartphones, deploying the Japanese company’s proprietary technology solutions.
According to a new report by Nikkei, both companies will likely announce details of the agreement within this week, which will help Sharp to reinforce its LCD panel business.
Sharp Corporation is undergoing a tough time with average performance, amid the peak and dip demand scenario for televisions. In early November, the company reported that it expects a considerable net loss of 450 billion Yen by the year ending March 31, 2013, and a drop by 408.97 Yen per shares, compared to a forecast for loss of only 250 billion Yen or 227.21 Yen per share.
Sharp will reportedly provide the U.S chipmaker Qualcomm with its IGZO or indium-gallium-zinc oxide semiconductor technology, enabling them to reduce the power use of LCD panels considerably.
In lieu of this technology, Qualcomm will make a huge investment of 5 billion Yen that will give it a 5-percent stake in Sharp. Sharp will also receive an additional 5 billion Yen once there has been sufficient progress in the development of next-generation LCD panels.
It is expected that this venture, or technology outsourcing, can improve the business condition of Sharp to a certain degree.
At the verge of Sharp witnessing a three-quarter loss of its market value this year, followed by dipping market shares and massive losses, the company agreed to sell almost half of its total 92.96 percent stake in Sharp Display Products Corp (SDP) to Hon Hai Precision Industry Co. in Taiwan.
The SDP was earlier established as a joint venture between Sharp Corp. and the Japanese consumer electronics giant, Sony Corp. The company expected that the deal with Hon Hai can stabilize the falling LCD panel manufacturing operations in Sakai.
At the same time, the company aimed at strengthening its cost competitiveness by the buying power of Hon Hai Precision. Unfortunately, the deal between Sharp and Hon Hai was stopped following the falling stock prices of Sharp.
Sharp stated that in late September, the company has secured a syndicated loan of 360 billion Yen from Mizuho Corporate Bank Ltd. and Bank of Tokyo-Mitsubishi UFJ Ltd. to achieve stability in its working capital.
But representatives from Sharp or Qualcomm were not available for any comment, and it is expected that the companies will declare about this deal officially this week.
Sharp is a renowned digital panel marker based in Japan, and has pioneered the LCD technology globally.
Based in San Diego, California, Qualcomm is a landmark chipmaker in the United States, selling base-band chips that connect mobile devices to cellular networks. It provides the base-band chips to leading wireless mobile device makers, and licenses the code division across multiple access technology.
The company is rapidly gaining from its sale of chips used by tablet makers as well.
Edited by Braden Becker