Why is Qualcomm Holding Out on Sharp?
Samsung (SSNLF.PK) may not be the only one trying to get a share of Sharp (SHCAY.PK) while it struggles. Qualcomm (NASDAQ:QCOM) has also invested a sizable amount in the floundering TV-maker, but a second investment has been delayed.
Qualcomm’s first investment in Sharp was for 4.94 billion yen ($52 million), and the second was to be about 5 billion yen ($52.7 million) but Sharp didn’t manage to meet the terms of the companies’ arrangement, so the second investment may be pushed back to the end of June.
In the agreement, Sharp was supposed to come up with a plan for mass producing its Micro Electro Mechanical System displays, but it hasn’t been able to do so yet. Qualcomm was set to make the second payment on its agreed investment at the end of March, but now it will wait for Sharp to meet the terms of the agreement. Sharp is also expected to work toward becoming profitable.
Sharp posted a 376 billion-yen ($3.96 billion) net loss at the end of its fiscal year in March of 2012, and it forecast a 450 billion-yen ($4.74 billion) loss for the current fiscal year. Midway through the next fiscal year, it will have maturing debt of around 200 billion yen ($2.11 billion)…