With Apple struggling to find the smartphone dominance it once had, it is now looking to consolidate some of its major suppliers under its own research and development arm – with the display chip development and manufacturing arm of Japanese chipmakers Renesas Electronics its first target. The Japanese company is known to have technology that improve image sharpness and battery life, and Apple is keen to bring this core technology in-house rather than look for outside help to supply it.
The Cupertino-based makers of the iconic iPhone brand is targeting Renesas SP Drivers, a joint venture between Renesas, Sharp and Taiwan’s Powerchip. Apple is looking to acquire Renesas’ entire 55% stake for an estimated 50 billion yen (around US$479 million). Unknown to most, Renesas SP is the world’s leading producer of microchip drivers and controllers for small and midsize LCDs – which one finds in smartphones and tablets – with its market share estimated globally at around 33%. The chips they produce determine the quality and performance of a display panel, and even the phone’s overall energy efficiency with regards to the usage of the said display. The Tokyo-based outfit logged a profit of 6 billion yen on sales in the fiscal year that ended on Monday. Upon acquisition, which Apple plans to complete by summer, it is said that most of the unit’s 240 or so employees in Japan will be retained.
Apple is said to be seeking Renesas’ entire stake in the outfit – the rest of the shares belong to Sharp (25%) and Powerchip (20%). Industry sources believe that Sharp is expected to be willing to sell all its shares in Renesas SP to Apple if the iPhone makers would ask for such a deal. Apple’s share of global smartphone shipments fell to around 15% of the market last year, compared to the growth of Samsung. Apart from that, a number of small Chinese and Taiwanese outfits like Huawei and Lenovo – focusing on producing low-cost Android units – is hot on Apple’s tail for a bigger share of the global smartphone market.
Comments Off on JDP Startup Corner: Pros & Cons of Working with a Partner in Japan