Sharp said that Hon Hai's investment would allow the company strengthen the competitiveness of its display business.
Sharp will also allocate about 200 billion yen on the development of OLED technology, and further invest in other businesses such as IoT, artificial intelligence (AI), energy, automotive and industrial solutions.
The agreement will see Sharp start mass-producing OLED screens by 2018, around the time Apple is expected to adopt the next-generation displays for its iPhones. The company plans to utilize both IGZO and LTPS technologies in order to overcome difficulties that existing OLED display products are facing: produce products with low power consumption with low cost.
Following the agreement, Sharp said it would remain indepentent, retain its existing employees, the Sharp brand, its research and development and manufacturing functions in Japan.
Last minute delay?
Although Sharp announced tghe deal with Foxconn, the Taiwanese manufacturer has been thrown into question by a last minute delay.
Foxconn said it had received new information from Sharp which needed to be clarified. The company said that Sharp had couriered over "new material information" to the management.
"We will have to postpone any signing of a definitive agreement until we have arrived at a satisfactory understanding and resolution of the situation," the Taiwanese company said.