Rumor: Apple to invest $1 billion in Sharp plant to produce iPhone, iPad LCD units

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Date: Wednesday, August 17th, 2011, 03:25
Category: iPad, Rumor

A rumor is percolating that Apple is planning to invest US$1 billion in a new Sharp factory for building screens for its iPhone and iPad products has resurfaced, just days after a separate report claimed that the next-generation iPad has been delayed in part because of production constraints from the supplier.

Per Reuters, MF Global analyst David Rubenstein resparked the rumor in a sales note to clients on Wednesday, giving shares of the Japanese company a lift of more than 2 percent.

“We think it is highly possible that Apple will make an investment in Sharp’s Kameyama plant to the tune of around $1 billion in order to secure stable supply of screens for iPhones and iPads,” he said, adding that Apple’s investment would have a “material impact on Sharp’s profitability.

Last December, Japanese business newspaper Nikkei claimed Apple would pay a “large portion” of the 100 billion yen (UD$1.3 billion) required to build a new LCD manufacturing facility and would buy “most” of the panels produced there. Production was said to begin at the plant in the later half of 2012.

On Monday, a rumor emerged that Sharp’s supply of 9.7-inch 2,048 by 1,536 resolution next-generation iPad displays are insufficient for an iPad 3 launch in 2011. It was noted that the high-resolution displays are “mainly supplied” by Sharp with a high price, and Apple’s other suppliers Samsung Electronics and LG Display are both “unable to reach a good yield.”

“Due to iPad 3’s requirements over the physical thinness, rich color support and toughness will all conflict with the panel’s technology restrictions; therefore, this could cause a delay in the launch,” the report said.

LCD displays have reportedly been a limiting factor for both the original iPad and the second-generation model.

Apple was also said to be helping Toshiba on a new LCD plant last year, but an official with the supplier claimed “nothing had been decided” regarding a new plant. In April, reports claimed Toshiba had become the sole manufacturer of LCDs for the iPhone.

Stay tuned for additional details as they become available.

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