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Qualcomm to invest $120m in struggling Sharp

US chip manufacturer Qualcomm has agreed to invest $120 million (£74 million) in the ailing Japanese electronics firm, Sharp.

As part of the agreement, Qualcomm's subsidiary Pixtronix will work with Sharp to develop new power-saving MEMS displays based on Sharp's IGZO technology, according to statements released by both companies.

"With this agreement Sharp will accelerate its strategy for growth in small-to medium-sized LCDs," said Sharp.

Sharp currently supplies screens to Apple for its latest iPhone and is also said to be considering collaborating with Qualcomm to manufacture chipsets. The deal, which will see Qulacomm make an initial injection of $60 million (£37 million) by the end of the year, is likely to make the US firm Sharp's biggest shareholder, although the exact percentage of shares has not been specified.

"Expanding our existing relationship with Sharp to jointly commercialise new MEMS display technologies will help both companies realise their shared goal of driving high performance and lower power displays for a variety of devices, including smartphones and tablets," said Derek Aberle, executive vice president and group president of Qualcomm.

The move will help keep the failing Japanese firm afloat after it admitted earlier this month that it may not be able to survive on its own. Sharp posted a 168 billion yen (£1.2 billion) operating loss in the six months ending 30 September and is facing an annual net loss of more than 300 billion yen (£2.2 billion) for the year ending March.

The electronics firm has struggled to keep up with Asian rival Samsung and maintain a foothold in the capital intensive TV and semiconductor market amid poor sales. Other former heavyweights in the Japanese electronics industry are facing similar ruin; Panasonic is expected to report an annual loss of $10 billion (£6.24 billion), after a hefty restructuring process prompted the cutting of 36,000 jobs throughout the company.