Both firms will co-operate in developing next-generation displays for mobile phones and tablet computers
US based chipmaker Qualcomm will invest about JPY9.9bn ($121m) in the struggling Japanese electronics firm Sharp which could be used for development of new LCD screens for mobile devices.
Sharp said that it would issue JPY4.9bn ($59.7m) worth of new shares to Qualcomm which could be increased further and the decicion in this regard with taken in March next year.
Following the investment, both firms will co-operate in developing next-generation displays for mobile phones and tablet computers.
During early 2012, Sharp revealed that it planned to secure JPY67bn investment from Taiwan's Foxconn Technology, while the deal got delayed due deepening of its financial woes along with decline in its share value.
The firm is anticipating a net loss of about JPY450bn by the end of the financial year to March due to heavy restructuring charges and drop in sales.
Qualcomm is mainly interested in Sharp's latest display technology, Igzo, which delivers improved resolution while consuming less power compared to the existing mobile displays.
Igzo has already been deployed in some of Apple's latest iPhones and iPads, while production errors have kept output lower when compared to the planned.
The Japanese firm is also planning to move to small displays to re-establish its position and it observes the next generation of top-end laptops as a fresh market.
In November, US based Intel and Qualcomm have considered joint investment of about JPY30bn ($369m) in Sharp.