According to a report by Japanese media Nikkei on Thursday, Intel Corporation and its 14 Japanese partners will utilize Sharp Corporation's LCD factory to study new developments in semiconductor technology.
This move not only saves some costs for Intel and its partners, more importantly, it provides Sharp with much-needed revenue as the company faces sluggish sales and increased costs.
Intel will collaborate with 14 suppliers, including Omron Corporation, Rene Chemicals Holdings, and Murata Machinery, to conduct research and development for backend chip production, including assembly stages, at Sharp's factory.
This initiative comes as Intel strives to strengthen its production capacity, especially its foundry business, to catch up with its main competitor TSMC. Intel also hopes to capitalize on the surge in demand for AI chips, which has greatly benefited TSMC.
For Sharp, the agreement brings much-needed capacity to their factory. Faced with a significant decline in LCD sales, Sharp was forced to cut some of the factory's capacity to 10%, leading to increased costs.
Following the report, Sharp's stock recouped some of its intraday losses, trading at 91.6 yen, down 1.6%, as of 22:30 ET (02:30 GMT).
