Sharp May Cancel Foxconn's Investment Talks

Since October 2012, two firms have stepped up to the financial plate by offering display maker Sharp a lifeline out of its current financial struggles: Samsung, which recently made a $111.5 million investment, and Qualcomm, which agreed to sink up to $120 million in December. Apple is also supposedly an unofficial life preserver, spending $2.3 billion more in the last quarter alone than it had forecast, reportedly on booking vendor financing.

"If Sharp were to enter into some form of bankruptcy, the key plant(s) used in producing screens for Apple might be "up for grabs" by creditors and they might be taken off-line, jeopardizing Apple’s production capacity, irrespective of contractual obligations," said Apple analyst Horace Dediu. "I believe that Apple’s late and unprecedented expenditure was to secure this asset."

In addition to Samsung and Qualcomm, a third "official" firm reportedly involved in talks with bailing out Sharp is Foxconn. However, Sharp president Takashi Okuda hinted during a press conference on Thursday that talks of investments from Foxconn are in the process of being cancelled. Both sides were expected to come to an agreement by the end of the month.

There's speculation that Sharp may be able to secure bank loans, thanks to its investment relationships with Qualcomm and Samsung. If that's the case, the display maker may be less interested in securing an investment deal with Foxconn – that's one less investor involved in Sharp's day-to-day business.

But Foxconn still claims that negotiations are ongoing, that it will continue to negotiate with Sharp to "seek any possible breakthrough." Both parties will be able to continue their cooperative relationship once they agree to investment terms. Sources claim both are satisfied with their joint efforts thus far, which includes Sharp's LCD fab in Sakai, Japan.

The two recent deals with Qualcomm and Samsung have thrown the display maker a lifeline as it struggles to stay afloat while South Korean and Chinese TV manufacturers continue to pound Japanese manufacturers like Sharp, Sony Corp and Panasonic Corp in overseas markets. Reports in November stated that Sharp faced possible bankruptcy resulting from huge losses and crushed profits.

 

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  • omnimodis78
    ankit0x1Apl injecting 2 bn in Sharp along with Qualcomm n sammyin order word.....Apl CO-OPERATING? dis iz impossible

    This isn't twitter and you're not sending a text to one of your friends, so try to write normally.
    14
  • Other Comments
  • sykozis
    Maybe Sharp should try developing quality products.....
    1
  • Shin-san
    This is sad. My family and I have bought a lot of Sharp TVs in the past and they all lasted at least 5 years. They were all affordable and simply just didn't die. They've always been one of my favorite TV brands
    2
  • omnimodis78
    ankit0x1Apl injecting 2 bn in Sharp along with Qualcomm n sammyin order word.....Apl CO-OPERATING? dis iz impossible

    This isn't twitter and you're not sending a text to one of your friends, so try to write normally.
    14