LONDON – Communications technology company Qualcomm has agreed to invest up to 9.9 billion yen (about $120 million) to take about a 5 percent stake in struggling consumer electronics and liquid crystal display manufacturer Sharp.
The proposed equity investment will be used to expand an agreement between Qualcomm subsidiary Pixtronix Inc. and Sharp to develop and commercialize MEMS-based displays that could be manufactured using Sharp LCD production lines.
Qualcomm Inc. (San Diego, Calif.) announced it had acquired Pixtronix Inc. (Andover, Mass.) early in 2012 for a sum reportedly between $175 million and $200 million. The Pixtronix display – called PerfectLight – is based on a MEMS-based digital micro shutter that modulates light from an RGB LED backlight. A high switching speed makes it suitable for applications ranging from full-speed video to e-reader operation and Pixtronix claimed that the display offered greater than 170 degree viewing angles, more than 3,000:1 contrast ratio and 24-bit color depth at one quarter of the power consumption of equivalent size and resolution liquid crystal displays.
Pixtronix digital microshutter uses MEMS instead of liquid crystal to control light transmission.
In a statement Sharp said investment from Qualcomm, of up to 9.9 billion yen, would be devoted to development and capital costs to establish commercialization of the MEMS display. Sharp plans to use its LCD panel plant in Yonago, Tittori prefecture to develop the MEMS display.
Qualcomm said its equity investment in Sharp would take place in stages, and the consummation of the transaction is subject to certain contingencies.
"Expanding our existing relationship with Sharp to jointly commercialize new MEMS display technologies will help both companies realize their shared goal of driving high performance, lower power displays for a variety of devices, including smartphones and tablets," said Derek Aberle, executive vice president and group president of Qualcomm, in a statement.
"Sharp is targeting to accelerate the commercialization of MEMS displays by combining Sharp's cutting-edge IGZO technology and Pixtronix's MEMS display technology," said Yoshisuke Hasegawa, executive managing officer of Sharp, in the same statement.
The wording, while not absolutely clear, suggests that Qualcomm will not try to be the sole source for the MEMS display but will let Sharp manufacture and sell the technology under its own name.
Indium gallium zinc oxide [IGZO] is a semiconductor material introduced by Sharp as an alternative to amorphous silicon as the transparent thin-film transistor in the active matrix for an LCD screen. With higher electron mobility it allows smaller pixels faster reaction times.
Although Sharp is recognized as a technology leader in displays it has been struggling for some time and entered into a deal with Terry Gou, the founder of contract manufacturer Hon Hai Precision Industry, which trades as Foxconn. However, Sharp's falling share price since March of 2012 led to calls to renegotiate the deal.