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Sharp May Cancel Foxconn's Investment Talks

By - Source: DigiTimes | B 12 comments

Sharp's president hinted that financial negotiations between the company and Foxconn may be cancelled soon.

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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  • 14 Hide
    omnimodis78 , March 17, 2013 10:14 AM
    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.
Other Comments
  • 1 Hide
    sykozis , March 17, 2013 9:13 AM
    Maybe Sharp should try developing quality products.....
  • 2 Hide
    Shin-san , March 17, 2013 9:36 AM
    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
  • 14 Hide
    omnimodis78 , March 17, 2013 10:14 AM
    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.
  • 4 Hide
    christarp , March 17, 2013 11:42 AM
    Shin-sanThis 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

    Are you implying 5 years is a long life for a tv? Lol.
  • 0 Hide
    xpeh , March 17, 2013 12:53 PM
    christarpAre you implying 5 years is a long life for a tv? Lol.


    Yeah, my Hitachi plasma has been with us for about 8 years now and it's still going strong.
  • 3 Hide
    anti-painkilla , March 17, 2013 2:01 PM
    christarpAre you implying 5 years is a long life for a tv? Lol.


    Sadly these days anything lasting a day over warranty is long life.
  • -2 Hide
    PreferLinux , March 17, 2013 3:15 PM
    anti-painkillaSadly these days anything lasting a day over warranty is long life.

    Um, they need to normally last somewhat longer than that otherwise the manufacturer will get nearly 100% returns...
  • 2 Hide
    DRosencraft , March 17, 2013 3:40 PM
    Sharp has had instances of great success, and great failure. Their line of office products never seemed to really gain much traction, and the TV market became saturated by other makers, pretty much pushing Sharp's market share into the basement. Sadly for Sharp it isn't clear there is much of a future for them, loans and investments, or not. The best they can hope for at this point is to sell to someone who might have use for their facilities and manufacturing streams.
  • 1 Hide
    dark_knight33 , March 18, 2013 2:23 AM
    I have a
    christarpAre you implying 5 years is a long life for a tv? Lol.


    I have a Panasonic RP-HDTV that I bought in 2003. It's no longer the main TV of the house, but it gets used for cartoon DVDs almost every day. It's a good TV with a lot of life left, even with the dimming CRTs. 9 years of service before replacement, and that was a fluke that it got replaced. I have an even older 27" Pro-Scan SDTV from '93 that still works well and I keep as a standby. If a TV I bought only lasted 5 years (and died without outside influence) before needing to be replaced I'd likely never buy that brand again.

    People shouldn't expect to have to replace appliances due to failure before 10+ years. If you do, you bought too cheap. Most of the appliances I've bought in the last 15 years have gotten replaced by new models because they are obsolete, not broken. The hardest part about the whole thing is throwing a working unit away because I can't find a home for it (even for free sometimes).
  • 1 Hide
    catfishtx , March 18, 2013 6:07 AM
    IMHO, Sharp makes the best big (60+ inches) LCD panels. They do make quality products, even if on a consumer level they are not well known. You don't get big time investors if you make bad products.
  • 0 Hide
    robochump , March 18, 2013 12:11 PM
    sykozisMaybe Sharp should try developing quality products.....

    Sharp does! The TV and PC monitor market is one of the worst consumer electronics market to be in. Very low profit and expensive R&D and manufacturing. This is one reason Apple is not jumping on the TV band wagon. Samsung was smart and spread its tentacles into many electronic markets that can help sustain its TV brand.
  • 0 Hide
    robochump , March 18, 2013 12:12 PM
    catfishtxIMHO, Sharp makes the best big (60+ inches) LCD panels. They do make quality products, even if on a consumer level they are not well known. You don't get big time investors if you make bad products.

    Remember when Mitsubishi was the best large screen brand? lol.