According to a report by Japanese business newspaper Nikkei, Apple is seeking to acquire 55% of Renesas SP Drivers?s stakes in the joint venture of Sharp and Taiwanese manufacturer Powerchip. This joint venture is formed to develop smartphone display chips, and 55% of its shares is estimated at 50 billion yen, approximately $479 million.
Renesas SP, composed of around two hundred and forty employees based in Japan, is the world?s foremost producer of controllers and drivers for midsize and small LCDs. They have a market share of around a third of the world?s LCDs.
Apple looks to close the deal with Renesas SP by the end of summer. The takeover would make Apple responsible for around one third of the worldwide supply of components of display chips. It is also expected that the Japan-based employees are to stay on with Apple after the transfer.
Apple appears to desire to bring the core technology in-house, rather than have the development of the LCDs be at the hands of the supplier. The chips in the LCDs are determinative, not just about the display of a smart phone or tablet, but also the gadget?s overall energy efficiency levels, as this account for around a tenth of battery use.
Apple relies on multiple suppliers from various manufacturers all over the world for each component. However, all of its iPhone LCD chips are from Renesas SP. As image quality is a very crucial factor in the smartphone market, Apple wants to join the design of key display components into its overall product development.
The joint venture is also owned by Sharp at 25% and Powerchip at 20%. Powerchip handles manufacturing. Meanwhile, Sharp is also expected to vend its Renesas SP shares to Apple, should the tech giant ask for it after its deal with Renesas SP. However, it is likely that Powership will want to retain its stake in the joint venture.The final deal may look like a similar deal which Apple made with GT Advance to produce sapphire tech.
Apple is yet to release a comment on the matter as of the time of this writing.