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Samsung Makes a $111.5M Investment in Sharp

On Wednesday Samsung said that it will invest 10.4 billion yen, or $111.5 million USD, in LCD panel manufacturer Sharp. The company said that the investment, which gives Samsung a 3-percent stake in the Osaka-based company, will not only help strengthen Sharp's LCD panel business, but secure a supply of large LCD panels for Samsung.

"Sharp has been currently supplying Samsung Electronics with LCD panels, "Sharp said on Wednesday. "Through this Capital Alliance, Sharp is going to further strengthen the alliance 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 notebook computers. This Capital Alliance will enable Sharp to secure its source of revenue from LCD business forming the company's core."

Between April 2013 and March 2015, Sharp plans to spend 6,900 million yen to introduce new technology for LCDs with high-definition features. An additional 3,234 million yen will also be invested during that timeframe including the "rationalization of manufacturing facilities for LCDs used in mobile devices such as tablet terminals and notebook computers with high-definition features."

Samsung's investment follows one made by chipmaker Qualcomm back in December who agreed to sink as much as $120 million USD in Sharp as part of a joint development of next-generation MEMS displays. The resulting product is described as "a display using ultrafine process technology and existing display manufacturing infrastructure with features including high color reproducibility and low-power consumption." It will consist of Sharp's IGZO tech and Qualcomm subsidiary Pixtronix's MEMS display tech.

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 even said Sharp faced possible bankruptcy thanks to huge losses and crushed profits.

But one analyst claims that Apple bailed out the struggling display manufacturer – pushing over $2 billion USD in the last quarter alone -- because Sharp is a key supplier of screens for the iPhone and other iDevices, and like Samsung, wants a secured supply. Another analyst currently believes that Samsung made its recent investment so that Apple doesn't have exclusive access to Sharp.

Currently Sharp's biggest push is its high-resolution indium gallium zinc oxide (IGZO) screens which are thinner than conventional LCDs, require less backlighting, and consume only a tenth of battery power. That's because the tech allows the screen to display a static image without needing to constantly refresh, a factor that drains battery power in typical LCD displays.

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