TOKYO - Sharp Corp. said Tuesday it has agreed with Qualcomm Inc. to jointly develop next-generation display panels, with the U.S. telecommunication product maker investing up to 9.9 billion yen in Sharp through third-party allotments of new shares.
The energy-efficient display for smartphones and tablet computers will be developed by integrating Sharp's technology for advanced "Igzo" power-saving liquid crystal displays and technology called the micro electro-mechanical system, which is owned by Prixtronix Inc., a wholly owned subsidiary of Qualcomm.
The struggling Japanese electronics maker is expected to first receive around 5 billion yen by the year-end. The rest will be invested by the end of March after achieving certain results in display development, under certain conditions including that Sharp will return to the black on an operating basis in the second half of fiscal 2012.
Sharp will issue new stock at 164 yen per share, compared with its closing share price of 174 yen Tuesday on the Tokyo Stock Exchange.
With the first capital injection, Qualcomm will hold a 2.6 percent stake in Sharp, while the terms of the second allotment are undecided.
Sharp is continuing talks on a capital tie-up deal with Taiwanese business partner Hon Hai Precision Industry Co., but the negotiations have stalled as Sharp's stock price has plummeted since the two companies reached an accord last March.
Sharp, which is aiming to turn its business around by expanding its supply of Igzo LCD panels, is also in negotiations with Intel Corp. of the United States over a business alliance.
In the first half of the business year through March, Sharp's group net loss expanded to 387.58 billion yen from a loss of 39.82 billion yen a year earlier, due to the flagging television business.