Sharp may not need Foxconn after all

Mar 17, 2013
3
Sharp may not need Foxconn after all

Sharp has been in a financial rut for quite a while now, and if things don't go its way, it could wind up filing for bankruptcy. Many companies have rallied to save Sharp's financial back by making generous investments. Samsung invested about $111.5 million in Sharp to gain a 3% stake in the LCD panel manufacturer, and Qualcomm invested $120 million in order for Sharp to develop MEMS display technology for Qualcomm's subsidy, Pixtronix.

Foxconn wants to be one of Sharp's investors as well, and the two parties have been in talks for quite a while. However, Sharp had stated at a press conference held on March 14th that talks with Foxconn are falling through. Foxconn responded by saying that its trying everything it can to secure a deal with Sharp. The two have been very satisfied with their joint LCD fabrication plant located in Sakai, Japan.

Many have speculated that Sharp is hesitant in sealing any deal with Foxconn because it's currently looking to obtain loans from banks. With Samsung's and Qualcomm's investments behind it, Sharp believes it has a much higher chance to convince banks that giving it a loan is a great idea. With the bank loans, Sharp doesn't necessarily need another investor on its back telling it what to do.

Sharp's business is very important to many manufacturers. It provides displays for a variety of technology, including laptops, tablets, and mobile phones. Apple had spent $2.3 billion more on Sharp's displays than it had expected in Q4 2012. Horace Dediu, an analyst whose primary focus is Apple and mobile phones, stated that if Sharp did file for bankruptcy, Apple's production capacity may be jeopardized. He believes that "Apple's late and unprecedented expenditure was to secure this asset." Sharp's investors have helped the company stay up-and-running, despite the huge losses it had suffered last November.

[via Tom's Hardware]


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