Shares in struggling Japanese electronics maker Sharp jumped 17 per cent on Wednesday after media reports of a $US108 million tie-up with South Korean giant Samsung.
Shares in Sharp opened up 17.06 per cent at ¥350 ($3.60) on the Tokyo Stock Exchange before easing slightly to ¥344.
The Nikkei business daily and other media reported on Wednesday that Samsung was set to make a capital injection in a deal that would give the South Korean firm greater access to smartphone and tablet computer screens.
Sharp would sell Samsung new shares worth around ¥10 billion ($A104.93 million) for a 3 per cent stake and use the funds to bolster its bottom line, the reports said.
The investment would make the South Korean group Sharp's fifth largest shareholder overall and the largest non-financial stakeholder.
An official announcement was expected on Wednesday, Nikkei said.
Sharp has suffered from stiff competition in the market for liquid crystal screens that has pushed prices lower, and would now provide such products made at its plant in Kameyama, central Japan, to Samsung on priority.
The plant currently ships many of its screens to Samsung's arch rival Apple, and the agreement should allow Samsung to avoid having to invest massively in new production capacity.
According to Nikkei, the two companies could explore cooperation in other areas as well.
Sharp expects to close its fiscal year with a net loss of ¥450 billion ($A4.75 billion), and has been searching for industrial and financial partners.
In March 2012, it signed an accord with the Taiwanese group Hon Hai, also known by its commercial name of Foxconn, that would see the latter acquire a 9.9 per cent stake in Sharp for ¥550 per share.
However, the deal faltered and was reported last month to have been suspended before coming to fruition.
Sign up for MIS Asia eNewsletters.