Intel Corporation (NASDAQ:INTC) and Dell Inc. (NASDAQ:DELL) have been offered stakes in the Japanese electronics company Sharp Corporation (PINK:SHCAY).
Sharp’s future has been in doubt recently due to management issues, and the company is now desperately seeking investors in order to stay afloat. Sharp, which makes display monitors, is reportedly in talks with the semiconductor maker Intel Corporation (NASDAQ:INTC) and technology corporation Dell. Sharp Corporation (PINK:SHCAY) is said to be seeking investments of $480 million. Other smaller companies, including QUALCOMM, Inc. (NASDAQ:QCOM), another semiconductor company, are also in talks with Sharp for a smaller investment that may be in the form of equity in Sharp or paying off some of its debt, which was recently downgraded to ‘junk’.
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Sharp Corporation (PINK:SHCAY) is asking both companies to take as much as a $240 million stake in either equity or debt. According to a report by the Wall Street Journal, Sharp is offering “a stable supply of breakthrough display technology” in exchange for the stakes. According to the report, Sharp “warned earlier this month that it is facing conditions that may raise uncertainties about its future as a going concern.”
Earlier in the year, Sharp Corporation (PINK:SHCAY) held talks with Hon Hai, but they failed to reach an agreement as its president asked for a seat on Sharp’s board – which the company didn’t agree with.
Sharp is said to be counting on a new display technology called IGZO in order to turn its fortunes around. The new IGZO screens use less power than current screens; significantly increasing the day-to-day lifespan of mobile devices before they need charging. The number of pixels per inch is also increased, allowing for sharped resolution and more accurate and responsive touch screen technology.
If Dell Inc. (NASDAQ:DELL) and Intel make successful offers, they will likely be guaranteed access to Sharp’s next generation IGZO displays. Dell may benefit from such an investment if it plans on moving into smartphones and tablets. For Intel, however, the benefit may be somewhat more tenuous, though the company may find the IGZO displays are useful for its recent push with its ‘ultrabook’.