|
 The talks on what would be a rare acquisition in Japan for the U.S.
technology giant come as competition heats up in the smartphone
industry, with pressure to produce larger, sharper and less
battery-draining screens.
Apple's once undisputed command of the global mobile electronics
supply chain has diminished in past years as Samsung Electronics Co
and other manufacturers that make smartphones powered by Google
Inc's Android began to dominate the market.
That makes the advanced chips made by the Renesas Electronics Corp
division all the more valuable in future.
Renesas, a loss-making Japanese chipmaker that is restructuring to
focus on its core auto business, is also in talks with other
companies on selling its 55 percent stake in the chip division,
known as Renesas SP Driver, people familiar with the matter said on
Wednesday.
The people did not name the other companies, nor indicate the
current status of the talks.
Desire for control over a venture that makes all the display control
chips for the iPhone as Apple battles rival products from the likes
of Samsung makes a compelling case for Apple to seek a deal,
industry officials and analysts said.
Apple "certainly might not be happy that someone else might want it
(the venture)," said Damian Thong, analyst at Macquarie.
"Apple routinely buys in key technology components and software
which they feel are important for the development of their products.
It's not new. What is unusual is that they're doing it in the
context of a Japanese firm."
Renesas said on Wednesday it was considering selling the Renesas SP
Driver unit, but declined to comment further.
Apple did not respond to an email seeking comment.
"GRAVE SIGNIFICANCE"
The Nikkei business daily, which was first to report on the talks,
said Apple could buy the Renesas stake for 50 billion yen ($483
million) by summer. It added that Sharp Corp could also sell its 25
percent stake if requested to do so by Apple. Taiwan's Powerchip
owns the remaining stake.
Shares of Renesas surged after the report by as much as 19 percent
to 934 yen, their highest in more than three years. They pared those
gains to end up 6 percent at 831 yen, compared with a 1 percent rise
in the benchmark Nikkei average.
A deal by Apple would be a rare foray into a Japanese technology
industry that has suffered from aggressive competition by ambitious
rivals like Samsung in the last decade.
[to top of second column] |
Renesas, formed from struggling chip units at conglomerates Hitachi
Ltd, Mitsubishi Electric Corp and NEC Corp, has racked up nearly 650
billion yen ($6.28 billion) in net losses over the last eight years.
Sharp has also posted heavy losses in recent years.
Renesas SP Driver, the largest maker of chips used to control mobile
device screens, supplies all three of the companies that make
displays for the iPhone, industry sources say: Sharp, Japan Display
Inc and South Korea's LG Display Co Ltd.
"There's no doubt that, for Apple, the question of who buys Renesas
SP is a matter of grave significance," said one Japanese display
industry source, who asked not to be identified due to the
sensitivity of the matter.
Control over the supply chain has become increasingly crucial among
smartphone makers. While up to now Apple has relied on outside
suppliers for many key parts, Samsung makes vital parts for its
Galaxy smartphones, from screens to chips to capacitors, in-house.
That gives it greater control over costs, production schedules and
specifications, as well as product information.
The business at the center of the talks has its admirers, industry
watchers say,
"Renesas SP Driver is strong in technology for LCD (panel drivers,"
said one industry analyst, who declined to be named. "Other driver
makers can't catch up to its technology," he said, emphasizing its
strength in high resolution and power-saving features.
($1 = 103.5750 Japanese yen)
(Additional reporting by Sophie Knight in Tokyo and Sruthi
Ramakrishnan in Bangalore; writing by Edmund Klamann; editing by Kirti Pandey, Christopher Cushing, Kenneth Maxwell and Lisa
Shumaker)
[© 2014 Thomson Reuters. All rights
reserved.] Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |
