Chipmaker Qualcomm Inc is set to buy about 5 percent of Sharp Corp, reports said yesterday, as the cash-strapped Japanese electronics giant looks for a capital injection to repair its balance sheet.
The ￥10 billion (US$122 million) investment by US-based Qualcomm comes as Sharp, mired in heavy losses, has also reportedly been talking with other US technology giants, including Intel Corp and Dell Inc, about a possible investment.
The Qualcomm deal would see the pair jointly develop energy-efficient LCD panels for smartphones using the Japanese firm’s technology, with the US company getting new Sharp shares equal to about 5 percent of its current market value, Jiji Press news agency reported.
The agreement calls for Qualcomm to invest about ￥5 billion in Sharp by the end of the year, with the other half invested as the joint venture progresses, the Nikkei Shimbun said.
News of the deal gave Sharp shares a boost in Tokyo where the embattled stock rose 1.2 percent to ￥174.
In a short statement yesterday morning, Sharp said: “Today’s reports about a US chipmaker’s investment in our company are not what we have announced.”
Sharp has suffered a series of credit rating downgrades and warned it expects to lose about US$5.6 billion in the fiscal year to March next year.
The Osaka-based maker of Aquos -brand electronics has announced thousands of job cuts while cutting wages for employees — from the factory floor to the executive boardroom — and selling real-estate to shore up its balance sheet.
Earlier this year, Sharp said it had reached a capital injection deal worth about US$800 million with Taiwan’s Hon Hai Precision Industry Co (鴻海精密), which makes Apple gadgets in China, but the deal stalled as Sharp’s share price nosedived.
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US
CORPORATE SCANDAL: Cathay Life has invested NT$13.3 billion in Bank Mayapada since 2015, but the latest loss of NT$8.8 billion has completely written off its investment Cathay Life Insurance Co (國泰人壽) yesterday said it would recognize an investment loss of NT$8.8 billion (US$298.1 million) in Indonesia’s Bank Mayapada Internasional Tbk PT due to concerns about the lender’s operations amid a corporate scandal. The company said it would revise its earnings result for June, from a net profit of NT$6.52 billion to a net loss of NT$520 million, its first monthly loss over the past 17 months. After booking an investment loss of NT$5.2 billion in Bank Mayapada earlier this year, Cathay Life has so far recognized total investment losses of NT$14 billion in the lender, executive vice president
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported that revenue last month expanded 25 percent annually, but fell 12.8 percent month-on-month to NT$105.96 billion (US$3.59 billion). In the first seven months of this year, the chipmaker’s revenue surged 33.6 percent to NT$727.26 billion, compared with NT$544.46 billion a year earlier. TSMC has said it aims to grow its revenue by more than 20 percent this year. The company has since May 15 stopped taking new orders from Huawei Technologies Co (華為), its second-biggest customer after Apple Inc, due to the US’ restrictions on exports containing US technologies. TSMC has no plans to
The US stock market has been on a tear, yet the country’s economy is in the dumps. So why do so many people believe — undoubtedly incorrectly — that the stock market has decoupled from reality? The economy many people experience, while bleak, is local, personal and, for the most part, either not publicly traded or plays only a small part in the stock market’s moves. To explain why these personal experiences have so little effect on equity markets, we must look more closely at the market role of the weakest industry sectors. The surprising conclusion: The most visible and economically vulnerable