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TOKYO |
Thu Sep 20, 2012 9:56pm EDT
TOKYO (Reuters) - Sharp Corp's stock jumped on Friday after a local media report said the cash-strapped Japanese display maker was in talks to make U.S. chipmaker Intel Corp its biggest shareholder.
Sharp, which supplies screens for the Apple iPhone and iPad and is in talks to sell a stake to fellow Apple supplier Hon Hai Precision Industry Co, denied the report. Its stock, which has slid by more than two-thirds this year, was trading 4.5 percent higher in Tokyo.
The Mainichi newspaper reported on Friday, without citing sources, that Sharp wants more than 30 billion yen ($383 million) from Intel. The Japanese company last week said that talks to sell Hon Hai a 9.9 percent stake had stalled as the Taiwanese company sought a say in Sharp's management in return for the investment.
With as much as 360 billion yen of short-term commercial paper loans to repay, Sharp needs cash. The maker of Aquos TVs is for now relying on its main banks, Mizuho Financial Group and Mitsubishi UFJ Financial Group, for funding.
An Intel spokesman declined to comment on the report, which said the two could reach a deal as early as next month.
Intel is attracted by Sharp's technology for small and midsize liquid crystal display (LCD) panels, the Mainichi said.
Intel is promoting ultra thin laptops to counter tablets computers from Apple Inc. Earlier this year, Intel signed deals with several panel makers to ensure adequate supplies for a wave of Ultrabook laptops with touch screens expected to hit the market following Microsoft's launch of Windows 8 in late October.
Ultrabook computers, which critics say may be too expensive for many consumers, are Intel's big bet to reinvigorate a PC industry that is stagnating due to consumers' growing preference for tablets and smartphones.
Sharp, with its TV business in retreat, is looking to small displays to spark a revival in its fortunes. Rather than nestle deeper in Apple's supply chain, Sharp sees the new generation of ultrabooks as a fresh market for its most advanced displays.
The jewel in Sharp's technology portfolio is the IGZO display, which can operate at much lower power consumption than conventional LCD displays, is thinner because it requires less backlighting, boasts a highly-sensitive touch screen and very high definition.
All of those advantages Sharp's chief financial officer, Tetsuo Onishi said this month, make it a perfect fit for ultrabooks using Microsoft's latest operating system.
"Lower power usage is going to become a major consideration," Onishi said at a briefing in Osaka.
Sharp in the year ending March 31 expects a net loss of 250 billion yen, after losing 376 billion yen in the last financial year.
($1 = 78.2450 Japanese yen)
(Reporting by Tim Kelly, Chris Gallagher and Chang-Ran Kim in TOKYO, Noel Randewich in SAN FRANCISCO; Editing by Chang-Ran Kim and Eric Meijer)
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