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.