Sharp announces $111 mil tie-up with Samsung

Read Wall Street Journal article on this.

http://blogs.wsj.com/korearealtime/2013/03/08/sharp-draws-flak-for-samsung-deal/?mod=WSJ_korearealtimeRealTime

That's not true. Apple has been using many display suppliers in Korea and Japan. After Apple dropped Samsung, LG, Japan Display, and Sharp, were the ones supplying Apple with the Retina displays. LG still produces more Retina displays for Apple, than Japan Display and Sharp combined.

And guess why Sharp was the first company to be dropped by Apple when they were cutting back purchases of screens after a sluggish iPhone sale?

Because they are the only ones that can provide the Retina display which is based on IGZO technology.

SamuraiBlue,

That's what Japanese say since they failed to mass market it after Sony tried it with their 11 inch TV.

Koreans went five steps further and they've successfully done what Japanese companies failed in doing - increasing the size and lifespan of the OLED.

LG is already mass producing and selling the 50 inch OLED TV's. And Samsung is almost ready to go on sale in the summer. Japanese on the other hand still rely on LCD.

I was in the computer store yesterday in the US. Out of 50 TV models (different sizes and brands) on display for sale, 35 of the Korean brands were more expensive than the Japanese. While only 15 Japanese were more expensive than the Korean. In terms of high end smart TV's, Korean TV's dominated while none for Japanese. And guess why Sharp was the first company to be dropped by Apple when they were cutting back purchases of screens after a sluggish iPhone sale?

Papi2013

OLED technology had been in the market for years. How much longer will it take to place it into mass prodution?

The problem with OLED is that it has not lived up to it's expectation and everyone is saying we will make it right NEXT YEAR for the last five years.

No Samurai,

Samsung's 3% stake is just a share of the stock market and they will have no access to the managing aspect of the company. That charge is not just unwarranted, it's a bald faced lie. Samsung's plan for Sharp is simple. They want their cheap panels sold with fire sale prices. The weakening Japanese Yen also helps the already weakened pricing further. This means Samsung doesn't have to spend huge amounts of money by building a tenth generation production center on LCD panels in which the technology is on its way out. So in essence, Sharp is helping Samsung to save money, while Samsung is Sharp's savior. Yes, it's only 3% share with $100million investment, but with Samsung purchasing Sharp's stocks, it gives Sharp's stocks a big vote of confidence which makes its stocks more attractive to others.

This deal is in no doubt Sumsung wanting trade secrets in developing commercial products from this patent.

SamuraiBlue, Samsung has all but abandoned R&D on LCD technology in favor of OLED which they lead by a mile. They're going to let the Chinese and the Japanese to fight it out in the LCD industry. Sharp's IGZO is highly overrated by Japanese. It's not going to be a game changer, like the OLED which the Korean companies are trying to steer the display industry towards because they are starting the mass production soon. Japanese showed their prototypes of OLED at CES this year in an attempt to copy the Koreans, surprising everybody. But knowing how Japanese companies have announced prototypes of cutting edge memory chips before that supposedly surpass everything but fall flat in their faces when it comes to mass producing them in real life...we all know they are years away from mass producing those OLED screens. Unfortunately Sharp doesn't have that much time to turn things around.

Papi2013

What in the world are you talking about?

Sharp placed into the market the IGZO display panel first in the market which Japan's ERATO-SORST holds patent on. Both Sharp and Samsung has license to this patent but Samsung had not been able to develop a product for the market in which Sharp has done. This panel can deliver 32-inch 3840×2160, 10-inch 2560×1600 and 7-inch 1280x800 and requires very little power to maintain a static image resulting to longer battery life for the system.

This deal is in no doubt Sumsung wanting trade secrets in developing commercial products from this patent.

kiyoshi, Sharp doesn't have any technology Samsung can steal. In fact, it's the other way around now. It's Sharp which is lucky if they can get any technology from Samsung. Sharp is a second rate, or arguably a third rate company (since they're teetering on the brink of bankruptsy). Can Japanese people wake up and smell the coffee from their own arrogance based on their racial beliefs that they are the most superior in Asia? The flying geese theory of the 1980's and 1990's where Japan is the mother goose, leading the > formation while the newly industrialized Asian countries follow Japan's lead, is no longer valid. This is the 21st century and the world has changed/changing rapidly.

“For Japan, it is symbolic and shocking news as Sharp, which used to be a frontrunner in the panel industry, is struggling while its rival Samsung has raced past it,” he said. Japan needs to WAKE UP, the Koreans, Chinese and maybe Indians will running circles around Japan and making $$$ while Japan keeps sinking into some economic BLACK HOLE, if JAPAN DOES NOT WAKE UP!

Sharp's troubles are not isolated case. Most of the big Japanese electronics giants have seen their fortunes tumble in recent years. Sharp knows it tough to raise money from substantial losses and their credit rating is cut to "junk" status means investors may no longer want to invest in them, making it harder for them to raise fresh money. I wouldn't be surprise if Sharp is out of business in the next three-four years if they don't produce something that's really competitive.

Chinese companies is to worry since they have no respect for patents, just like samsung did in its early days.

ne-tiger, read Yahoo Japan's reactions to this story saying they'll stop buying Sharp and that Sharp will have their technology stolen yadi yadi yad. And what you say is right - narrow mindedness, thinking they are better than anybody, refusing to open their closed eyes. Like kiyoshiMukai says, it's only 3% stake, and $115 million is a drop in the bucket for Samsung who wants to give Sharp's stock trading a huge bump with a vote of confidence. Instead of saying thanks, it's nothing but bad mouthing Koreans. As for the Chinese market, I'll end with the comment made by Samsung's CEO. "We don't worry about the Japanese electronic companies too much. But we do worry very much about the Chinese companies who are coming on very strong".

This is a good example of how Japanese's narrow mindedness is wrecking their country. They think they are better than everybody else in Asia. They whitewash their WW2 history without any consideration of China/Korea/Asian people's thinking. With their me against foreigner's attitude, they get stuck with their shrinking population and fortune.

Want to know how Korean companies got so powerful? Because they took advantage Chinese market. They are eating Japan's cake everyday.

3%... is almost nothing. Samsung has alot of spare cash but their momentum will eventually end. At this moment Sony, HTC and others have very capable Smartphones that can compete with galaxys. Just like Xperia Z.

Chucky3176

At this point, theres no point in flexible displays. apart from using it as toilet paper with Samsung brand name.

Hopefully this new influx of cash will turn Sharp around, but I have my doubts.

I can see the incriminations already. "Sharp gives their technology to Samsung who will steal it! Bad Koreans!". It's the Sony-Samsung deal of mid 2000's all over again, when Samsung was supplying Sony with panels. Once the deal ended, Japanese blamed Samsung for Sony's demise. They said Samsung stole Sony's technology (nevermind the fact that it was Samsung selling their panels to Sony, so that doesn't really make any sense). Nothing that Japanese did, is ever their fault.

Don't pay attention to Japanese nonsensical charges. The real story is this.

Samsung's strategy is very simple. They want Sharp afloat. Samsung doesn't have enough production capacity currently to meet their screen demand, due to the Galaxy line of products selling like crazy. But Samsung doesn't want to expand their production in case of the smartphone sales decreases in the future. So they've been currently buying ton of displays from Sharp to make up for the shortage. Samsung is currently Sharp's second biggest customer after Apple. Without Samsung's business and without Samsung's planned increased purchase of Sharp displays, the company would be in much worse shape. Sharp's Japanese workers are celebrating because their jobs are in better shape, after being worried sick that Samsung might one day, drop them as a supplier.

But they better not think this is going to last forever. Samsung's need for Sharp displays are only temporary because Samsung is very close to mass producing smartphones with flexible displays. They have the graphine chips that could shrink and expand and fold, with the displays. They are about a year away from announcing a game changing device - a tiny phone that will expand into a huge tablet. This means, Samsung's production line will change to accomodate the new technology. Would Samsung need Sharp's displays based on outdated technology then?

This "tie-up" is a disaster waiting to happen. Sharp is dreaming if they think Samsung is going to cooperate with them for any length of time. Samsung's main focus for the last 20 years was to destroy Japanese companies like Sony, Matsushita, Hitachi and Sharp and they're not done yet. This so called tie-up is just Samsung trying to get Technology from Sharp.... once Sharp realizes this tie-up is only a one-way street they will dissolve the relationship. Lee-Kun-Hee is probably sitting in his office right now thinking of ways to suck Sharp dry and putting on a gracious face all the while. I cannot believe Sharp is in such dire straits that they have sunk to a tie-up with Samsung. Think about that before you buy shares in Sharp. It is time to short them.

The idea seams solid. Samsung wants back in the Japanese market, Sharp needs cash. Samsung does not want to pick up Sharp's debt. It's possible that sharp will be able to sell some parts for korean market devices. Also if Apple starts leaning on Sharp more for parts, they still have to hand some that cash to Samsung.

Japanese and Koreans working together!!! --- It's actually really refreshing news!

Now Kpop should take over Jpop and make some amazing music and programming as content for mobile smartphones is priority to create venue for advertising revenue shift from traditional media

Before I believe only JP companies can stop Samsung instead of becoming part of it! I feel terrible however it's good for Samsung, as to Sharp, I don't know this move good or bad. It seems Samsung's going to dominate east asia.

Too bad no one helped Pioneer which had one of the best TVs out at the time. Very expensive but great screen. It would be interesting if by buying into Sharp, Samsung could get some of its TVs sold here. LG has a few but not much to speak of yet. Price wise, Korean TVs are probably cheaper and only Sony and Toshiba have introduced 4K-2K at very high prices. There must be a very good reason Samsung is sticking its nose into Sharp business. They know what they're doing.

However, the deal would not solve all of Sharp’s woes, he added, as the firm cuts jobs and overhauls its business after saying in February its loss in the nine months to December had doubled to about $4.6 billion.

They're getting a 111 million$ investment while loosing 4.6 BILLION$, sounds like spare change to me. Everybody seems very interested in Sharp's LCD technology, however Sharp is still loosing tons of money making things like cell phones that only a few people(read Japanese) want. Perhaps they should spin off their LCD division and let foreigners pour money in while closing down unprofitable business and lay off those workers, sound like economics 101 to me.

Having foreigners buy small stakes in Sharp is preferable to tens of thousands losing their jobs.

This was always the problem with Japan. Being a protected market helped to support their companies, but it locked out foreign capital when it was needed. Times are changing...

Models display Sharp's line of Galapagos tablet comptuers in Tokyo on November 29, 2010

Just realized how ironic this caption is. The Japanese electronics firms have struggled in great part due to the infamous "Galapagos Effect" -- them desinging products principally for the Japanese market and becoming too inward focused. And here they are less than three years after having introduced these "new" products, getting help from Samsung.

Does Samsung need more access to smartphone and tablet computer screens? Does buying 3% of Sharp do that? This is a vanity purchase and, like so many of those, will end up with Samsung losing money. They should stick to making stuff - not making bad investments.

Wow. Guess the phrase "Japan Miracle" is certainly dead as it applies to the electronics sector. Hope Sharp gets back on its feet. Japan needs it and Sony, Panasonic, etc. to re-gain their footing in the global market.

Must be humiliating for those Jp right-wingers. Today 3%, tomorrow?

invite Sony also and make it triple S !

The best way to make your enemy your friend is to ask them for a favor.. and infusing money in a company that has lost its way could be considered doing Sharp and its Japanese employees.. a favor.

Having foreigners buy small stakes in Sharp is preferable to tens of thousands losing their jobs.