Struggling Sharp eyes LCD tieup with Intel

Kyodo

Sharp Corp. may form a business tieup with Intel Corp. over small and midsize liquid crystal displays for smartphones and tablet computers, company sources said Friday.

The move comes as the cash-strapped company’s hoped-for accord with Hon Hai Precision Industry Co. remains stuck as the Taiwanese firm seeks to revise the terms of a planned capital tieup after Sharp’s share price plummeted on news of Sharp’s first-quarter losses.

Although the Osaka-based electronics giant produces small and midsize size LCD panels with low energy consumption and high picture quality, demand remains sluggish. Intel is also facing an uphill struggle with its smartphone semiconductor business.

The two companies are therefore studying ways to cooperate in areas where they have the potential to expand sales, the sources said.

Meanwhile, Sharp denied a report that it is discussing a possible capital alliance with Intel.

The Mainichi Shimbun reported in its Friday edition that the struggling company is in talks with Intel over forming a capital alliance valued at more than ¥30 billion.

Sharp logged a record group net loss of ¥376 billion in fiscal 2011 on slumping LCD TV and panel sales and expects to remain in the red this business year.

The company is holding talks with Hon Hai to review the capital tieup agreement concluded in March, but there has been little progress to date. The two companies also disagree over how to cooperate in the small and midsize LCD sectors.

To receive additional assistance from financial institutions, Sharp is drawing up a restructuring plan to return to profitability in the business year starting in April, including asset sales and a substantial cut in its workforce.