“Apple is rumored to be in talks with Renesas regarding a potential acquisition of a 55% stake in its display chip joint venture with Sharp and Powerchip, Renesas SP Drivers,” Trefis Team reports for Forbes. “The struggling Japanese chipmaker is restructuring to increase its focus on its core auto business and limit exposure to non-core business units, which is why it is looking to offload its stake in the display-chip unit. It is in talks with other companies as well, but Apple seems to be the frontrunner in these discussions given its offer of $480 million and Renesas’ strategic importance to the iPhone maker.”
“Renesas SP Drivers is the world’s leading manufacturer of drivers and controllers for small- and mid-sized LCD displays used in mobile devices, and accounts for almost a third of the market,” Trefis reports. “It is also the sole supplier of display controllers used in the iPhone, and counts all three of the companies that make iPhone displays, namely Sharp, Japan Display and LG Display LPL -0.45%, among its key clients.”
“Sharp, which owns a stake of about 25% in Renesas SP Drivers, is likely to follow suit and sell its stake to Apple should the Apple-Renesas deal materialize,” Trefis reports. “Overall, the deal could cost Apple about $700 million in cash should it acquire both Renesas’ and Sharp’s stakes at the same valuation. This could be an effective utilization of Apple’s cash hoard, almost 80% of which is held in foreign accounts and cannot be repatriated back to the U.S. without attracting a huge tax outlay. However, it will hardly move the needle on Apple’s overseas cash balance, which stood at over $124 billion at the end of the December quarter.”
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