Friday, April 4, 2014

Apple’s Deal with Chip Designer Renesas

Apple, it is reported by Japan’s largest business daily, is likely to buy the unit of a Japan based chipmaker that makes display related chip for Smartphone and is looking into acquiring controlling interest and eyeing the unit of Renesas Electronics that would help to improve image sharpness and battery life. Renesas SP Drivers is a joint venture between Renesas, Sharp and Taiwan’s Powerchip and Apple would acquire Renesas’s entire 55 percent stake for 50 billion yen ($479 million).

If the deal gets struck with Renesas, Sharp Corp would be selling all its shares in Renesas SP Drivers to Apple if the US company requests for such a transaction after a deal with Renesas, it was reported.

Sharp owns about 25 percent of the venture with Powerchip handling the manufacturing, holds the remaining 20 percent. According to Nikkei, Renesas SP Drivers being a leading supplier of driver and controller chips for small and midsize LCDs has a share of around one third of the global market. Display driver and controller chips both play a key role in the display’s quality, power efficiency and performance.

Improvement on Future iPhones

Apple’s discussion with Renesas comes as an improvement on future iPhone with larger displays for users familiar with it. As mobile screens grow larger and sharper, handset makers are heading in finding ways to make phone displays more energy efficient making them thinner.

According to Sanford C. Bernstein analyst Mark Newman, he states that `for iPhone to maintain its premium image, it has to keep pushing its technology forward especially in displays’, which is very true since user are always seeking to get more updated versions on their products.

Chip Expertise In-house

With the share of the Smartphone market falling, Apple it seems to be bringing in more chip expertise in-house heading in being a chip giant. Apple has already bought in a host of chip related companies which include PA Semi that designed and sold semi conductors and Intrinsity, a designer of ARM processor cores.

Both these chip companies have enabled Apple to move processor design expertise in-house, the result of which can be seen in cutting edge silicon like the 64 bit A7 which powers the iPhone 5S, iPad Mini Retina as well as iPad Air. According to business daily, it was reported that Apple expects to complete the stake purchase by summer and most of the unit’s 240 or more, employees in Japan are likely to stay on after the transfer that Apple is keen on completing in summer.

As Apple has relied on multiple suppliers for components, to gets all its iPhone liquid crystal display chips from Renesas SP and with image quality being a crucial thing for Smartphone, Apple probably would want to meld the design of core display components into an overall product development.

Apple acquired Israel based flash memory startup Anobit in 2012 and recently purchased PrimeSense, the 3D sensor company behind the Microsoft’s Kinect sensor. Apple’s share fell to 15.2% last year on global Smartphone shipments, with less than half of archrival Samsung with China’s Huawei along with other low cost competitors hot on its tail.

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