Why is Qualcomm Holding Out on Sharp?

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While the company struggles, capital alliances like the ones it has made with Qualcomm and Samsung are useful for maintaining liquidity. But, they could also play into the power struggles going on in the global market.

With Samsung as the world’s biggest smartphone maker, Qualcomm as the world’s biggest smartphone chip-marker, Foxconn — which has invested 67 billion yen ($71 million) into Sharp — as a big maker of Apple’s (NASDAQ:AAPL) products, and Sharp as Japan’s largest liquid-crystal display maker, having some sway over Sharp could damage relationships between any of the other companies involved.

Currently, Samsung is the largest Sharp shareholder of those mentioned, as it recently took a 3 percent share in the company for 10.4 billion yen ($110 million). But, Qualcomm may soon come close, pending its second investment.

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Just how things will work out will be more clear once Qualcomm has finished its investment and when a situation arises, such as a materials shortage, in which Sharp has to prioritize one customer over another.

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