Apple Investing in Sharp for iPad, iPhone LCD Screens: Report

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Some tech rumors go away, while others are revived, including this one.

Fueling speculation that Apple may increase its orders to Japanese parts makers, media reports say the US technology giant is likely to invest in a Sharp Corp. factory to secure LCD screens for iPads and iPhones.

According to Reuters, “the proposed move, along with an investment in a new LCD factory of Toshiba Corp, comes as Apple and key supplier Samsung Electronics battle in courts over patent disputes, spurring talk that Apple may diversify suppliers.”

Sources who spoke on the condition of anonymity told Reuters that Japanese chipmakers, including Elpida Memory Inc. and Toshiba Corp., are expecting larger orders from Apple “if the US company’s relationship with Samsung deteriorates further,” the report said.

This isn’t the first time such an Apple-LCD investment rumor has circulated. Since late 2010,  Japanese media have reported that Apple may invest around 100 billion yen ($1.3 billion) in the Sharp plant, according to Reuters.

During Apple’s first-quarter financial announcement in February, Apple chief operating officer Tim Cook stated that the company had executed long-term supply agreements with three vendors for LCD panels. These agreements were expected to involve about $3.9 billion in inventory component prepayments and capital expenditures during a two-year period, TechZone360 reported.

With the rising popularity of smartphones and tablets, small and medium-sized liquid crystal display (LCD) panels have become crucial user interfaces. Hence, the demand for these panels is growing rapidly.

Apple already expends vast quantities on displays. In 2010 alone, Apple spent nearly $2 billion on displays for its iPad and iPhone lines, sourcing LCD panels from LG Display, Samsung Electronics, Sharp and Toshiba Mobile Display.

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Erin Harrison is Executive Editor, Strategic Initiatives, for TMC, where she oversees the company's strategic editorial initiatives, including the launch of several new print and online initiatives. She plays an active role in the print publications and TechZone360, covering IP communications, information technology and other related topics. To read more of Erin's articles, please visit her columnist page.

Edited by Jennifer Russell

Executive Editor, Strategic Initiatives

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