Qualcomm Completes $120 Million USD Investment in Sharp

Qualcomm has injected the second
half of its investment into Sharp.
Qualcomm has reportedly completed
its $120 million USD investment in
Sharp ( pdf), thus giving the company
3.53 percent ownership of the
struggling display maker. Qualcomm
initially only provided half of the funds
up front, saying that Sharp needed to
meet several conditions before the
investment balance was paid in full.
The deal to sink $120 million into
Sharp was made back in December 4,
2012. Qualcomm said that in order to
receive the second half, Sharp must
finalize specifications for a new
power-saving screen to be used in
tablets and smartphones by March 29.
Sharp was also tasked to generate an
operating profit of 100 billion yen ($
1.02 billion USD) in the second half of
its fiscal year.
However Sharp was unable to meet
the March deadline, and was given an
extension to June 30. But Sharp has
obviously met both requirements and
is now receiving its additional $60
million injection from Qualcomm.
They now plan to combine
Qualcomm's MEMS (Micro Electro
Mechanical System) display products
with Sharp's IGZO screens in a
number of upcoming devices with
varying sizes.
"The subscription payment was fully
made today as planned in respect of
the issue of new shares for the second
round which was resolved at the board
of directors meeting held on June 7,
2013," Sharp said.
Qualcomm is one of several investors
throwing Sharp a financial lifeline.
Samsung holds a 3.08 percent stake
in the company thanks to a $112
million (10.4 billion yen) deal back on
March 6, 2013. Sharp said the cash
investment will "further strengthen the
alliance" between Sharp and
Samsung, and continuously provide a
long-term, stable and timely supply of
LCD panels for large-size TVs and
small- and medium-size LCD panels
for mobile devices such as notebooks.
Sharp originally received a $4.4
billion bailout from banks back in
October 2012, but had to mortgage its
factories and offices to secure the
loans. It also planned to trim its
overall workforce by 10,000 and sell
off assets.
The company was also talking with
Foxconn for a $709 million investment
(66.9 billion yen), giving Foxconn a
9.9 percent stake, but as of March 26,
the deadline to reach an agreement
had passed. However Sharp said it
was still in talks with Foxconn
although as of June there has been no
word on the deal. However their
jointly-managed LCD plant Osaka
Prefecture reported a 7.4 billion yen
net loss for the April-December period.