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$1B Apple-Sharp deal more likely LCD prepayment than plant investment

post #1 of 10
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Contrary to recent reports that Apple would invest $1 billion in an LCD manufacturing plant from Sharp, industry insiders believe it's more likely that Apple is simply making an advance payment to secure display components.

Citing sources in the Taiwan supply chain, DigiTimes reported on Thursday that Apple more likely made a deal with Sharp for panel purchases, rather than actually investing in the Japanese company. Insiders said given the business relationship Apple has had with another display maker, LG, it's unlikely Apple would invest $1 billion in a facility.

Regardless, "tighter collaboration" between Apple and Sharp means Apple will become less reliant on its rival and chief supplier, Samsung. Despite the fact that Apple buys a great deal of components from Samsung, the two companies are engaged in a bitter legal battle with multiple lawsuits spanning across the globe.

Another company that may feel the squeeze from an Apple-Sharp deal is CMI. The company recently began supplying IPS panels for the iPad 2, but closer ties between Apple and Sharp could hurt orders for the company.

Earlier this week, rumors were reiterated that Apple plans to invest $1 billion in a Sharp factory that would build screens for its iPhone and iPad products. Such a move was said to ensure stable supply of LCD displays.

Apple's moves with display suppliers are believed to be tied to recent issues with components from LG. A report earlier this month claimed that LG Display lost its status as the leading iPad 2 display maker after LCD shipments were allegedly plagued by quality issues.



Following the problems, Apple shifted more of its orders to Samsung and new partner CMI. CMI reportedly hopes to become a regular supplier for Apple, and is ramping up production of 9.7-inch iPad displays. It now has a monthly output of about a million units.

"But CMI still needs to stabilize the quality of its IPS panels and enlarge production capacity in order to stand a chance of winning more orders from Apple," Thursday's report said.
post #2 of 10
If so that's a boat load of confidence in whatever the screens are for and a world of hurt for anyone wanting to copy as per usual. I say this hoping there may be Apple HD TVs in the offing Of course they maybe for iPads etc.
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From Apple ][ - to new Mac Pro I've used them all.
Long on AAPL so biased
"Google doesn't sell you anything, they just sell you!"
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post #3 of 10
The ability to drop $1 billion in a single payment is a testament to Apple's desire to have a huge cash hoard. It allows them to lock in production volumes and resources so suppliers can make their investments at lower risk.

Having $60 billion in the bank truly rocks for apple.
post #4 of 10
NYTs reported this week that Apple has 40 Billion held offshore due to tax laws in the US. This is money that they generated overseas, cannot logically return,and is now used to re-power the Asian economies.

Plus, once you consider a new Flat Panel Manufacturing plant would be 4+ Billion to build these days, its a real deal to lock up production like this.

Tim Cook strikes again.

And consider, if they hold another 30+ billion domestically, they could build a spaceship to engineer the future in.
post #5 of 10
Fundamentally this is no difference, They pay 1B in advance, Sharp use this 1 Billion to build Plant, the deal would also include special treatment and stocks guarantee for apple.

And BTW, A Flat Panel Manufacturing Plant does not take ANY WHERE near 4+ Billion to build.
post #6 of 10
Quote:
Originally Posted by 801 View Post

NYTs reported this week that Apple has 40 Billion held offshore due to tax laws in the US. This is money that they generated overseas, cannot logically return,and is now used to re-power the Asian economies.

Plus, once you consider a new Flat Panel Manufacturing plant would be 4+ Billion to build these days, its a real deal to lock up production like this.

Tim Cook strikes again.

And consider, if they hold another 30+ billion domestically, they could build a spaceship to engineer the future in.

With billion held in China and Apple's growth rate I'd think investing $4 billion in a plant or two would be advantageous. We're already seeing unfavorable results of their component sourcing where one manufacturer is quantifiably better than than another.
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Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"
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post #7 of 10
Quote:
Originally Posted by ksec View Post

Fundamentally this is no difference, They pay 1B in advance, Sharp use this 1 Billion to build Plant, the deal would also include special treatment and stocks guarantee for apple.

And BTW, A Flat Panel Manufacturing Plant does not take ANY WHERE near 4+ Billion to build.

Might be wrong, but Intel FAB 42 is a 300mm facility projected at 5 B, and if Apple wanted to build a flat panel shop for consumer grade large displays from scratch, I would think 4 B would not be too far out of line.
post #8 of 10
Quote:
Originally Posted by solipsism View Post

With billion held in China and Apple's growth rate I'd think investing $4 billion in a plant or two would be advantageous. We're already seeing unfavorable results of their component sourcing where one manufacturer is quantifiably better than than another.

It's billions held in Bermuda, and such tax havens. Nothing to do with China.
post #9 of 10
I hope Tallest Skil isn't reading this, but I think this is more diversionary red-herring-ism from DigiTimes, under orders (from whom?) to cover up the fact that the iPad HD is coming out this year.

Hope springs eternal -- that all the naysayers are wrong. I personally could use a little more time before the high-res version comes out, so I don't really care that much.
post #10 of 10
The Intel Fab 42 is State of the Art Tech, It is not only a simply Node Shrink Fab, where previously i would have cost less then 3 - 4B, it is a Fab meant to be upgrade to 400mm Wafers.

A Display Plant Fabs is no way near as expensive to build as a Processor Fab.
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