Samsung takes 3% stake in Sharp screen production

The Wall Street Journal reports that Samsung has paid $112 million for a 3% stakes of Sharp's LCD screens, which is a key supplier of LCD screens for Samsung and Apple.

Currently, Sharp is the technical leader in the production of large LCD panels that makes it possible to produce more than 60 inch screens at a lower price unlike other manufacturers. Despite this advantage, the company has financial difficulties over the last 18 months, dismissing 11,000 employees as well as laying key assets.

Sharp desperately looking for an external source of funding to keep itself afloat, having received a grant of the bank and investment in $120 million from Qualcomm late last year. Foxconn also intended to invest in Sharp, but the deal did not take place because the company's financial position continues to deteriorate.

Sharp supplies LCD panels for Apple and Samsung, including screens for iPhone and iPad. A WSJ blog suggests that Samsung would get priority in future transactions.

"Monex market analyst Toshiyuki Kanayama said a Samsung-Sharp tie-up could "help Sharp to at least raise the efficiency of its panel-producing plant, as it will ship products to Samsung, whereas it had prioritized supplying components for Apple."

Samsung’s bid to turn Sharp, once a major competitor, into an ally, shows how serious it is in winning a global battle with Apple for dominance in the lucrative market for mobile devices."

Samsung has concentrated on the production of screens on OLED technology. Analysts note that a closer relationship with Sharp will help the company to expand production of LCD screens.

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Written by Svetlana Osipova

Wednesday, March 6, 2013. 20:09

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