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December 04, 2012

Qualcomm to Make $120M Investment in Troubled Sharp

By Tracey E. Schelmetic, TMCnet Contributor

Most electronics companies today could use a bit of an infusion in cash, and troubled Japanese company Sharp (News - Alert) looks to be set for an infusion from Qualcomm, Inc. The U.S. semiconductor company is reportedly investing as much as $120 million in Tokyo-based Sharp.

The investment is expected to make Qualcomm (News - Alert) Sharp’s biggest shareholder as well as boost Sharp's efforts to remain viable. The agreement will also see the two companies collaborating in the fabrication of chipsets.

Reuters is reporting today that as part of the agreement Qualcomm, through its Pixtronix subsidiary, will work with Sharp – which supplies screens to Apple, Inc. for its latest iPhone (News - Alert) – to develop new power-saving screens based on Sharp's IGZO technology, said Sharp.

"With this agreement Sharp will accelerate its strategy for growth in small-to medium-sized LCDs," the Japanese company said.

Sharp has been holding on by the skin of its proverbial teeth, and earlier this year narrowly avoided a complete melt-down thanks to a $4.4-billion bank bailout. It’s hoped that the Qualcomm cash will calm Sharp investors and boost its shareholder equity ratio.

Qualcomm will make an initial investment of 4.93 billion yen ($59.91 million) by the end of the year in a private placement of stock at 164 yen per share, 10 yen less than Tuesday's closing price. That will give the U.S. company a 2.64-percent stake after dilution, reported Reuters (News - Alert).

Qualcomm's investment in Sharp will reportedly be made in two stages. Initially, Qualcomm will pay Sharp ¥5 billion yen, or $61 million, by the end of 2012 through a private placement of new shares.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO Miami 2013, Jan 29- Feb. 1 in Miami, Florida.  Stay in touch with everything happening at ITEXPO (News - Alert). Follow us on Twitter.

Edited by Braden Becker
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