Intel, partners to use Sharp’s Japan LCD plants for chip research- Nikkei

Investing.com-- Intel Corporation (NASDAQ:INTC) and its 14 Japanese partners will use Sharp (OTC:SHCAY) Corp's (TYO:6753) liquid crystal display plants in Japan to research new developments in semiconductor technology, Japanese media outlet Nikkei reported on Thursday.

The move will provide some cost savings for Intel and its partners, but more importantly, will bring much-needed income to Sharp, which has been struggling with sluggish sales and mounting costs. 

Intel will engage in research and development of back-end chip production, including assembly, along with its 14 suppliers, which include Omron Cor (TYO:6645), Resonac Holdings Corp (TYO:4004) and Murata Machinery at Sharp’s factories, the Nikkei report said. 

The move comes as Intel struggles to shore up its production, particularly in its foundry business, to catch up with TSMC (NYSE:TSM), its biggest competitor. The chipmaker is also looking to capitalize on a boom in demand for artificial intelligence chips, which has greatly benefited TSMC. 

For Sharp, the deal brings much-needed capacity for its factories, as the electronics maker grappled with a sharp decline in LCD sales. Weak sales saw Sharp cut production at some of its factories to as low as 10% of capacity, which also resulted in heightened costs.

Sharp’s shares trimmed some intraday losses after the report, and were trading down 1.6% at 91.6 yen by 22:30 ET (02:30 GMT).