Sharp's shares collapsed to the lowest level in 37 years in Tokyo and its bonds fell after the maker of Aquos TVs forecast an annual loss of 250 billion yen ($3.2 billion), bigger than the company's market valuation. That slump prompted Foxconn to announce Aug. 3 it will seek a lower price for its 9.9 percent stake while pledging to forge ahead with the deal.
Foxconn wants a stake in Sharp to secure access to the latest technology for parts used by its biggest customer, Apple. In offering a lifeline, Gou is betting that Sharp will continue to provide it with key components for the iPads and iPhones that Foxconn assembles, while ensuring one of Apple's important suppliers survives.
Last week Sharp revealed it would start shipping screens this month that were destined for the iPhone, perhaps in an attempt to incite some confidence in the company.
"Shipments will start in August," Sharp's new president, Takashi Okuda, said at a press briefing in Tokyo on Thursday after the company released its latest quarterly earnings.
The next iPhone is said to feature in-cell touch panels that integrate touch sensors into the thin-film transistor (TFT) LCD manufacturing process.