Intel Corp (INTC  ) and 14 Japanese partner companies will use Sharp's underutilized LCD plants in Japan to research advanced semiconductor production technology.

The collaboration will reduce the alliance's costs and provide Sharp with the needed income.

Intel will focus on back-end chip production processes, including assembly, with suppliers like Omron, Resonac Holdings, and Murata Machinery at Sharp's LCD factories, the Nikkei Asia reports.

Sharp's clean rooms will support new production methods, leveraging their suitability for minimizing particles and dust, which is essential for LCD and semiconductor production.

This move aligns with Sharp's goal to repurpose its display factories for AI and semiconductor fields.

Nvidia Corp (NVDA  ) is already eying Intel as a potential supplier. Taiwan Semiconductor Manufacturing Co (TSM  ) battled supply chain constraints and is looking to hike its prices to capitalize on the AI frenzy.

According to Alexis Crowell, Intel's VP and CTO for Asia-Pacific and Japan, Intel plans to integrate AI capabilities across various products, including computers, edge computing, and software.

It intends to enhance its AI chip offerings with the Gaudi 3 chip, which will likely generate $500 million in revenue in the latter half of 2024.

Recently, AI server vendor Super Micro Computer, Inc (SMCI  ) partnered with Foxconn, a supplier of Apple Inc (AAPL  ), Japanese electronics firm (KDDI  ), and telecom partner Sharp to construct an AI data center in Japan that will leverage Nvidia's advanced chips.

Price Action: INTC shares traded lower by 1.61% at $30.29 at the last check Thursday.