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.
The rumored price is US$480 million.
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. 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, among its key clients.
Having a single source for display drivers and controllers used for the LCDs in the iPhone is a risk. It doesn’t matter that Apple is sourcing from three different display manufacturers for the iPhone if all three depend only on Renesas SP Drivers.
Still, Apple’s interest in a display-chip designing unit potentially signals its intention to become more vertically integrated in its mobile device businesses. Apple has so far designed only its app processors and fingerprint scanners, and could be looking at integrating display design as well with its overall product development.
I think Apple is simply trying to mitigate the risk of a supply chain disruption by depending on a single company for a set of critical components.