Sharp and Panasonic - decline in TV sales result in losses
The company is forecasting a loss of ¥450 billion yen (£3.5 billion) for the year to 31 March 2013.
Sharp has had its credit rating cut to 'junk' status which means some institutions may no longer invest in them, making it harder for them to raise fresh capital. In a statement, Sharp said: "The company is in circumstances in which material doubt about its assumed going concern is found."
Analysts said that given its troubles, Sharp may find it tough to survive in the long run.
Sharp's troubles are not isolated. Several of the big Japanese electronics giants have seen their fortunes decline recently. Sony reported a loss of ¥15.5 billion for the quarter ending September.
Also, Panasonic expects to make a loss of ¥765 billion in the current financial year. It had previously forecast a profit.
Japanese electronics makers have been hurt by a slowing demand and falling prices of TVs in key markets.