Qualcomm Inc. has thrown a $120 million lifeline to Sharp Corp., in exchange for which it has taken an equity share in the Japanese company. Although the investment doesn’t seem like much when compared with the $4.4 billion bank bailout Sharp required earlier this year, the relationship may bolster confidence in the troubled company’s future.
The initial focus of the investment is Pixtronix, the company Qualcomm acquired last year that primarily makes resource-efficient screens for the iPhone 5 and other multimedia devices with small-to medium-sized LCD screens.
Pixtronic and Sharp will collaborate on creating low-power MEMS displays screens based on Sharp’s IGZO technology and may also work together on chipsets.
Sharp’s shareholder equity ratio at the end of September stood at 9.9 percent, half of the commonly accepted minimum for financial stability, according to Reuters. The deal announced today calls for the investment to take effect in stages conditional on Sharp returning to profit in the second half of the business year ending March 31.
Qualcomm – press release
Pixtronics – http://www.pixtronix.com
New York Times – Qualcomm Buys a Stake in Sharp
Image courtesy of Pixtronics