Apple in talks to buy stake in Renesas SP Drivers for $483 mn

Shares of Japanese chip maker Renesas Electronics surged in today's trading after reports that Apple Inc is considering buying its stake in a joint venture that designs chips for smartphone displays.

Renesas shares surged over 10 per cent in early trading on the Tokyo Stock Exchange, following a report from Japanese business daily Nikkei.

Nikkei reported that Apple is in talks to buy Tokyo-based Renesas entire 55 per cent stake in Renesas SP Drivers, a joint venture with Sharp Corp and Taiwan's Powerchip, for about 50 billion yen ($483 million).

Renesas SP Drivers, which designs liquid crystal display chips for iPhones, is 55-per cent owned by Renesas, 25 per cent by Sharp, and the remaining 20 per cent by Powerchip.

Sharp may sell its stake to Apple if the maker of iPhone and the iPad asks, the report said.

A closed deal would be the biggest acquisition by Apple to date after it paid $429 million in 1996 to buy Steve Jobs founded company NeXT.

Formed in 2008, Renesas SP Drivers makes LCD Drivers that drive small and mid-sized LCD panels.

It is the largest manufacturer of display products for mobile gadgets, with a share of around a third of the global market.

In recent years, the market for LCD panels has grown due to the growing popularity of LCD TVs, mobile phones with higher quality displays, and the use of LCDs in products such as car navigation systems and game consoles.

The market growth for small- and mid-size LCDs is expected to be especially strong because of the emergence of mobile phones supporting sophisticated multimedia capabilities such as built-in digital cameras and reception of TV programs to enable advanced functionality and higher picture quality standard.

In addition, the demand for mobile phones is also accelerating in emerging markets such as the BRICs economies, notably China and India.

Renesas, formed through the 2010 merger between NEC Electronics Corporation and Renesas Technology Corporation, is one of the world's largest manufacturers of chips for mobile phones and automotive applications.

It is the world's largest manufacturer of microcontrollers and the second largest manufacturer of application processors. Renesas is also known for LCD drivers, RF ICs, mixed-signal integrated circuits and system-on-a-chip semiconductors.

Renesas has posted net losses of nearly $6 billion over the past seven years due to stiff competition from its rivals like Samsung, Hynix and others.