The deal comes at a time when Sharp has been activity trying to restructure its operations.
Analysts have reacted to the news by saying that the investment from Samsung was likely to provide a boost to Sharp's efforts to revive its business.
"For Sharp, this is good news from all fronts," said Gerhard Fasol of Eurotechnology Japan in Tokyo. "Not only can Samsung help Sharp smooth its production and operations, it can also become a key customer of Sharp's products, especially flat screens.”
His views were backed by a statement from the South Korean firm which said that the deal would help to "lay a firm foundation for Samsung to secure a steady supply of liquid crystal display (LCD) panels from diversified sources".
In the aftermath of the announcement, Sharp’s shares rose as much as 17 percent to 350 yen on the Tokyo Stock Exchange, before closing at 341 yen.
