Sharp reportedly seeks deal with Apple to retake control of iPhone LCD plant

Posted:
in iPhone edited July 2014
After Apple heavily invested in transitioning Sharp's Kameyama LCD plant from TVs to smartphone displays, the Japanese company is reportedly looking to retake control in a bid to diversify its customer base into China.

KameyamaSharp's Kameyama LCD plant in Japan's Mie Prefecture.


Sharp is floating a deal to Apple that could see the Japanese company retake control of its Kameyama No. 1 plant, which is supposedly dedicated to manufacturing LCDs for Apple's iPhone lineup, including the upcoming 'iPhone 6,' according to a report from the Nikkei Asian Review.

Under the terms of Sharp's proposed deal, the company would put up about 30 billion yen ($293 million) to buy smartphone display manufacturing tools, as well as a leadership role at the No. 1 plant, a source said. With the production equipment, Sharp wants to diversify its customer base beyond Apple to up-and-coming Chinese smartphone makers.

As for Apple, sources said the company is demanding Sharp not supply LCD panels to rival smartphone maker Samsung.

The plant is said to be operating at a utilization rate above 90 percent to churn out supply for Apple's forthcoming iPhone 6, meaning the agreement is unlikely to be settled anytime soon.

Sharp's Kameyama facility, located in Japan's Mie Prefecture, began life as an advanced HDTV LCD panel manufacturer in 2004. Following a drop in sales, Sharp switched gears and began producing displays for smartphones. According to reports, Apple supplied more than half of the roughly 100 billion yen ($987 million) needed for the transition, giving the Cupertino company operational control.

Recently, rumors that Apple would deploy IGZO panels in its next iPhone model were brought into question as the No. 1 facility dedicated to iPhone has not yet been retooled for the technology. Sharp's Kameyama No. 2 plant is equipped for IGZO, but company executives are hesitant to dedicate both lines to Apple.

Comments

  • Reply 1 of 9
    lorin schultzlorin schultz Posts: 1,925member

    So Sharp would like to take over control of the plant by paying one-third of what Apple invested?

     

    And Sharp thinks that a plant that is running at 90% capacity just to keep up with Apple's requirements is a good candidate for supplying other customers?

     

    And Sharp thinks Apple will accept risking their own supply in order to supply competitors?

     

    And Sharp think Apple will do this for a fraction of their own investment because, what, Apple needs the money?

     

    Gotta give Sharp execs credit for optimism.

  • Reply 2 of 9
    Methinks they are not very sharp!
  • Reply 3 of 9
    Sharp is now partially owned by Samsung. This move screams Samsung attempting to disrupt Apple's supply chain. Thankfully, it looks like Apple had the foresight to put guarantees in place to prevent an external partner from pulling off a disruption.
  • Reply 4 of 9
    SpamSandwichSpamSandwich Posts: 29,070member
    Time to call the loan!
  • Reply 5 of 9
    MacProMacPro Posts: 17,178member
    Is this simply a long winded way of saying 'Tim, please buy the entire company'?
  • Reply 6 of 9
    lorin schultzlorin schultz Posts: 1,925member
    Quote:

    Originally Posted by digitalclips View Post



    Is this simply a long winded way of saying 'Tim, please buy the entire company'?

     

    Sounds more like "Thanks for saving us but we're bored now. We want to play too!"

  • Reply 7 of 9
    bocboc Posts: 72member
    Chess time for an interim move.

    Long term, I would guess Apple does its own LCD facility somewhere in Asia. They have the volume/need to do it.

    Samsung either sells to Apple or Apple bails at some point.

    Pure guess is that a future version of advanced AMOLED may be what Apple wants before ordering a factory.
  • Reply 8 of 9
    inteliusqinteliusq Posts: 111member

    Sharp is floating a deal to Apple that could see the Japanese company retake control of its Kameyama No. 1 plant.

     

    How many of you saw that word and thought of Goku saying Kamehameha.

     

    "KAMEEE HAMEEEEEE HAAAAAAAAAAAAAAAAA"

     

    image

  • Reply 9 of 9

    Sharp needs to remember what they were like until Apple extended a lifeline.

     

    http://www.zdnet.com/apple-bailed-out-sharp-to-the-tune-of-2bn-last-quarter-analyst-7000007092/

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