For ages the two have been rivals, so sudden moves to smoke a peace pipe is a bit like Apple and Microsoft saying that they had been mates all the time.
The move appears to mostly come from clever negotiating from Sharp which needs an alliance in flat-screen TVs and mobile phone handsets, but it also needs some cash badly.
Samsung appears happy to write a cheque for $111 million in exchange for a three per cent stake in the Osaka-based company. It is likely that it will see a return in its money by getting a stable supply channel of liquid-crystal display panels.
According to NPD DisplaySearch, Sharp has been a key supplier of 40-inch LCD panels to Samsung, shipping over 400,000 units per quarter as well as 200,000 units per quarter of 60-inch LCD panels.
A report into the deal said that Sharp started to ship 32-inch (LCD panels) to Samsung at the beginning of 2013.
This means that Samsung will be buying more than one million panels from Sharp and it does not want someone coming in and muscling in on its supply.
Samsung can concentrate on the development of the next-generation organic light-emitting diode displays (OLEDs), which it has yet to mass produce while keeping its foot in the door with a nice low-cost supply of LCD TV display panels from its new chum.
It also isolates Apple from its main panel supplier. Sharp is currently one of the top display panel suppliers for Apple as it produces displays for the iPhone at its Kameyama plant.
Sharp can’t be too choosy about where its money is coming from. It wanted to raise millions from Foxconn, last year. But the deal fell through because the companies could not agree on the stock price and because Foxconn wanted to tell Sharp what to do.
Even after the deal with Samsung signed, the company still needs more investment. There is talk that either Intel writing a cheque but that might stuff up Sharp’s agreement with Qualcomm to manufacture next-generation LCD panels for smartphones in return for cash investments from Qualcomm.
As it is Qualcomm is already giving Sharp a contract in return for a three per cent stake in the firm once the project is completed.