The state-backed Japanese fund Innovation Network Corporation of Japan (INCJ) isreporteddly frontrunner to rescue Sharp, ahead of a rival approach from Foxconn (Hon Hai Precision), according to the latest reports. INCJ may invest about 300 billion yen ($2.6 billion), according to a Bloomberg report as well as previous reports from Japan. Foxconn has offered about 600 billion yen to buy the company and expects a decision this month.

INCJ’s investment would be the most recent example of Japan’s government providing support to struggling domestic companies to keep technology out of the hands of foreign rivals.

The Wall Street Journal on Thursday reported that Hon Hai, also known as Foxconn, was offering 625 billion yen and promising not to replace top management at Sharp.

Sharp's main advantage in LCDs is its IGZO technology, which allows for high definition and thin, touch-screen displays that consume less power than conventional screens.

Both Japanese manufacturers face strong competition from Samsung and LG Display, which have been working on OLED screens that do not require backlights and can therefore be thinner or curved.