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Qualcomm buys $120m Sharp shares

Becomes one of the firm's largest shareholders
Mon Jun 24 2013, 16:34
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CHIP DESIGNER Qualcomm has completed a $120m stock purchase in Japanese display maker Sharp.

Sharp has been looking for outside investment as it tries to balance the books after years of overinvestment in LCD television manufacturing. A number of chip vendors including Intel have looked into investing in the firm but Qualcomm has put pen to paper with a $120m deal that makes it one of the company's largest shareholders.

Like rival television maker Panasonic, Sharp has been hit hard as the demand for television sets has dried up. The firm invested heavily in LCD manufacturing technology and its executives have said that they were unsure of the firm's future.

Sharp's debt is already rated at junk status and the firm has laid off thousands of workers. Perhaps the firm's best hope is its IZGO display technology, which is being promoted by several mobile device makers as a low-power, high performance display technology.

Qualcomm's $120m investment is likely a ploy to get closer to Sharp's IZGO technology and incorporate it into reference designs using its Snapdragon chips.

For Sharp, its deal with Qualcomm might in turn push other firms to consider investing as Sharp seems to have the right stuff to make a key player in the smartphone and tablet market interested in putting significant cash down, if nothing else as a cash investment but more likely as a way to improve the working relationship between the two firms. µ

 

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