Sharp has been negotiating with Taiwan EMS behemoth Hon Hai for over a year. Those talks reached an impasse in August over what price Hon Hai would pay for acquiring a 9.9 percent stake in Sharp. Earlier this month, Sharp president Takashi Okuda signaled that the company is also "considering other alliances."
Beyond Intel or Qualcomm, Apple, Google, Microsoft, Dell and Hewlett-Packard were reportedly approached by Sharp for financial help in exchange for access to Sharp’s LCD technology.
Sharp’s mounting problems stem from it massive investment on large-screen LCD panels for TVs. In hopes of catching Samsung, Sharp's top management sought to achieve economies of scale in its panel production. But TV market dropped just as the investments were made, especially in Japan.
Sharp's technologies include its IGZO (indium-gallium-zinc oxide) and in-cell technologies, which integrate touch sensors directly into LCD panels. The panel technologies were adopted by Apple in the new iPad and iPhone 5. Apple extended financial support to Sharp last year in remodeling a fab originally built to produce large-screen TV displays to produce screens for mobile devices.
Sharp missed the delivery date of new IGZO panels by nearly half a year. They were supposed to be designed into Apple’s new iPad unveiled in March. Volume production of in-cell panels for Apple's iPhone 5 commenced at Sharp's Kameyama plant on the same day that Apple announced plans in September to release a new iPhone.
Sharp has lost three quarters of its value so far in 2012. It received a guarantee for 360 billion yen in loans from its two main lenders, Bank of Tokyo-Mitsubishi UFJ and Mizuho Corporate Bank, in September.The loans should sustain the company through its next financial year in March 2014.
Well, none of the companies mentioned in the story as potential investors will be a winner -- unless Sharp gets its act together. There is still a lot of work ahead for Sharp. Even if either Intel or Qualcomm can bring their customers to Sharp as potential buyers of Sharp's small to mid-range panels, that's not an automatic win either for Qualcomm or Intel -- unless Sharp can deliver goods on time, in good quality, in volume and at the price their customers demand.