Sharp delays $60 million from Qualcomm as display research falters
- 18 March, 2013 03:03
Sharp will postpone a US$60 million investment from Qualcomm that was to come this month, after the two companies were unable to establish test production of a new type of low-power display for mobile devices.
Qualcomm said in December it would invest up to $120 million in Sharp. The first half of the deal was completed a few weeks later, but the second part is dependent on Sharp working together with Qualcomm subsidiary Pixtronix to further develop its MEMS (microelectromechanical system) display technology.
"Some of the conditions for MEMS display mass production technology were not met," said Sharp spokeswoman Miyuki Nakayama on Monday.
The second investment was dependent on conditions including successfully building a test production line, establishing MEMS display module specifications and procuring resources related to mass production.
Sharp said talks with Qualcomm are ongoing, and the firms have extended the March deadline for the deal by three months until June.
The Japanese company was booking record profits on its LCD panel manufacturing until several years ago but over-invested in new factories. The company is actively pursuing deals with outside firms to stay in business, even as it goes through a restructuring that includes job cuts and selling off some of its core facilities.
Sharp is also facing a March deadline to finish a separate investment deal from Foxconn Electronics parent Hon Hai Precision Industry. Hon Hai invested $800 million in one of Sharp's main factories last year, but a second deal to buy shares of Sharp fell through after its stock price plunged.
Earlier this month, Sharp secured a US$110 million investment from Samsung in an unrelated deal. Sharp will become a major supplier of LCD screens for the South Korean electronics giant.
Qualcomm is hoping to partner with Sharp to launch its MEMS display technology, which Qualcomm has said falls between current LCD and e-paper screens in terms of screen quality and power usage. The company said it will work to combine it with Sharp's IGZO (indium gallium zinc oxide) screen technology, a separate low-power display technology that Sharp has used in its own recent phones and tablets, with the companies aiming to commercialize the new displays and build them using existing LCD factories.