Hon Hai Precision Industry, better knows as Foxconn, has offered to buy Sharp's liquid panel display (LCD) business and plans to seek funding from Apple, the Nikkei business daily reported on Monday.
Sharp said it could not yet comment on the report except to say it was "considering various options for the restructuring of the LCD business".
Hon Hai also declined to comment.
Sharp was once a highly profitable manufacturer of TVs and a favored screen supplier to Apple and others, but it has come under heavy pricing pressure from South Korean rivals.
In May, it sought a bailout of roughly $1.9 billion from banks and promised to cut 5,000 jobs, or 10 percent of its staff.
Rumors of a possible tie-up of Sharp with Hon Hai as well as cash injections from other entities had emerged last month.
Tie-up talks between Hon Hai and Sharp fell through in 2012 after the Japanese company baulked at demands that it said would have given the Taiwanese firm too much control.