Sharp Corporation (hereinafter referred to as "Sharp") and Pioneer Corporation (hereinafter referred to as "Pioneer") announce, as described in detail below, that Sharp and Pioneer have entered into a business and capital alliance agreement.

1. Purpose of Business and Capital Alliance
   Due to advanced digitization of electronic devices and products, the market circumstances for electronics companies continue to become severe, due to an increase of the cost of new product development and relevant capital investment. The management sees an opportunity in the strategic business alliance to enhance an efficient differentiation of business and to preserve corporate profits.
   Taking such circumstances into consideration, Sharp and Pioneer have decided to enter into a business and capital alliance agreement as described in detail below, to create new business and improve both companies' corporate value, by utilization of both companies' resources and through active cooperation, including efficient implementation of both companies' strengths and specializations, such as imaging and display technology, in which Sharp and Pioneer both specialize, and also Sharp's digital technology, communication technology and device technology, as well as Pioneer's optical disk technology, acoustic technology and car electronics technology.

2. Content of Business and Capital Alliance
1) Promotion of Joint Development
   Sharp and Pioneer will jointly proceed with development in the following fields in order to mutually utilize each company's technology and achieve further innovation.

(1) Next-Generation DVD Field
   To aim development of new "Next generation DVD" related products, by utilizing Sharp's specialization in device technology such as blue-violet laser diode and Pioneer's specialization in optical disk technology such as drive-module technology.

(2) Network-Related Field
   To aim for development of new network-related products in home electronics field by merging both companies' most advanced technology.

(3) Car Electronics Field
   To aim for creation of new business in car electronics field by combining Sharp's technology of small- and medium-size displays, communication and sensor technology with Pioneer's car navigation technology and other "in-vehicle" know-how.

(4) Imaging Field
   To aim for expansion of both companies' display business and development of new Audio-Visual products based on new concepts by mutually providing and/or merging each company's specialization in highly advanced imaging and display technology.

2) Expansion of Transactions between both Companies
   Sharp and Pioneer will strengthen business relations and increase transactions and trade volume between both companies by actively adopting each company's products and components.

3) Capital Alliance
   Sharp and Pioneer have agreed to finalize the capital alliance on December 20, 2007 in order to ensure a close and firm business alliance.
   The capital alliance includes Pioneer's new issuance of 30,000,000 common stocks which shall be fully allotted to Sharp, and to which Sharp shall subscribe the full amount through third party allotment. In return, Sharp shall dispose to Pioneer of 10,000,000 treasury stocks which Sharp now owns and Pioneer shall subscribe to the full amount by way of third party allotment. (Please refer to the separate press release concerning the details of the third party allotment by both companies.)

5. Predicted Effect on Business Forecast
   The effect of this business and capital alliance on both the consolidated and non-consolidated business forecast for each company for the fiscal year ending March 31, 2008 is expected to be immaterial, although in the middle- and long-term perspectives each company is expected to benefit from this alliance.