Qualcomm invests up to $120 million in Sharp, takes minority stake
The company is making the investment through its subsidiary Pixtronix.
Qualcomm today announced that it has expanded an agreement between a subsidiary and Sharp and taken an equity stake in the ailing electronics maker.
Sharp and Qualcomm subsidiary Pixtronix already have a display technology agreement between them, according to Qualcomm. This new deal extends that partnership. The agreement centers on displays using Sharp's IGZO technology, which is widely considered one of the best options for visual quality in the industry.
As part of the agreement, Qualcomm has dropped some cash in Sharp, earning it a minority stake in the company.
Sharp saw its sales drop 16 percent year-over-year to 1.1 trillion yen ($13.7 billion) in the six months that ended September 30. The company's net loss widened to 387.6 billion yen, dwarfing last year's six-month loss of 39.8 billion yen. That contributed to a rather dour outlook in a recent statement to investors.
"Sharp is in circumstances in which material doubt about its assumed going concern is found," the company said in a statement, essentially telling investors that it doesn't know how much time is left.
Sharp's failures haven't resulted from lack of trying. The company has used a wide range of cost-savings measures, including layoffs and asset sales, to address its troubles. One of its main focuses now, though, is raising cash.
Last month, a report surfaced, saying that both. In a statement e-mailed today to CNET, Qualcomm confirmed that it could invest up to $120 million in Sharp. The first half of that will be invested by the end of the year, while the remaining $60 million would be given to Sharp in the first half of next year, provided "certain technical milestones have been achieved."
The cash infusions might not end there. Last week, a report suggested. So far, however, neither company has confirmed that's the case.
Aside from the equity investment, Qualcomm says that Sharp and Pixtronix's expanded investment will accelerate their work on incorporating IGZO technology into Pixtronix's low-power displays.
Updated at 7:37 a.m. PT to include the investment information.