Investing.com – Intel Corp (NASDAQ:) and its 14 Japanese partners will use Sharp (OTC:) Corp’s (TYO:) liquid crystal display manufacturing plants in Japan to research new developments in semiconductor technology, Japanese media reported on Thursday.
The move will provide some cost savings for Intel and its partners, but more importantly will bring in much-needed revenue for Sharp, which has been struggling with sluggish sales and installation costs.
Intel will conduct research and development into server chip manufacturing, including assembly, with its 14 suppliers, including Omron Kor (TYO:), Resonac Holdings Corp (TYO:) and Murata Machinery at Sharp plants, a Nikkei report said.
The move comes as Intel struggles to strengthen its manufacturing, particularly in its foundry business, to catch up with TSMC (NYSE:), its biggest rival. The chipmaker is also looking to capitalize on the boom in demand for artificial intelligence chips, which has greatly benefited TSMC.
For Sharp, the deal will provide much-needed capacity for its factories as the electronics maker faces a sharp decline in LCD sales. Weak sales have led Sharp to cut production at some of its factories to 10% of capacity, which has also increased costs.
Sharp shares erased some intraday losses following the report and were trading down 1.6% at 91.6 yen by 10:30 pm ET (0230 GMT).