) has postponed its second installment of nearly 5 billion yen
($53 million) to be paid to the loss-bearing Japanese TV
manufacturer, Sharp Corporation. The installment - expected to be
made by the world's leading chipset maker for mobile handsets by
Mar 29 - is now slated for Jun 30.
In Dec 2012, Qualcomm decided to invest 10 billion yen ($120
million) in two installments. The first 5 billion yen was paid
through a private placement of new shares at the end of 2012 and
the remaining was scheduled until the production of a new panel.
The agreement will also facilitate Qualcomm to build new
power-saving screens using Sharp's IGZO technology.
However, Sharp Corporation failed to meet the above condition.
This has resulted in a delay in Qualcomm's second round of
An increased supply of TV sets coupled with stiff competition
from other TV manufacturers like
) and Samsung Electronics have hugely affected the Sharp's
business, resulting in continued revenue decline in the last few
quarters. Moreover, the company requires nearly $2.1 billion by
the end of Sep 2013, to pay off its convertible bond holders.
So, the investment from Qualcomm and the recent sale of a
3.08% stake in Samsung for $112 million will boost Sharp's cash
position to some extent. Moreover, Sharp also plans to sell its
Chinese TV assembly plant assets to Lenovo Group Ltd and its
Mexican TV factory to Hon Hai, in an attempt to improve its cash
Currently, Qualcomm carries a Zacks Rank #2 (Buy).
Other Stocks to Consider
Other stocks to consider in the semiconductor industry are
Texas Instruments Inc.
). Both these companies have beaten the Zacks Consensus Estimates
in the most recent quarter and currently have a Zacks Rank #3
BROADCOM CORP-A (BRCM): Free Stock Analysis
QUALCOMM INC (QCOM): Free Stock Analysis
SONY CORP ADR (SNE): Free Stock Analysis
TEXAS INSTRS (TXN): Free Stock Analysis
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