The two companies hope to ride a predicted 80 percent surge in sales of cell phones equipped with cameras over the next two years.
By year's end, the two companies will begin selling new camera-phone technology to cell phone manufacturers. This will consist of a combination of Texas Instruments cell phone chips, Sharp miniature cameras and color displays, and a set of camera-phone blueprints, they said in a joint statement.
The phones will use the world's most popular cell phone standard, Global System for Mobile Communications (GSM), according to a Texas Instruments spokesman.
Neither TI nor Sharp predicted when cell phones based on their chips and reference designs would be ready for retail sale. They did not disclose financial details of the deal.
Camera phones debuted in Japan about two years ago along with new services such as photo e-mails, downloadable video clips and wireless videoconferencing. While the phones are wildly popular in Japan, cell phone subscribers in Europe and the United States haven't shown nearly as much interest.
But analysts from IDC, a market research firm, believe that the advent of faster cell phone networks and better phones will spur interest in photo services. The analysts are predicting an 80 percent increase in camera phone sales worldwide in the next two years.
With the move, TI has increased competitive pressure on chipmakers Intel and Motorola, which also sell chips to the world's biggest handset makers. A Texas Instruments spokesman and Christopher Chute, a senior analyst with IDC, said Sharp hasn't reached a similar deal with either Intel or Motorola. A Sharp spokesman could not immediately confirm this.
"For Texas Instruments, this gives them a strong 'in'" for the next generation of camera phones, Chute said.