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Apple Said to Be Eyeing Chip Maker Renesas SP

According to a Nikkei report, Apple is looking to bring the development of display drivers and controllers in-house.

Apple reportedly is considering buying a controlling stake in a unit of Japanese-based Renesas Electronics that makes chips and controllers for displays used in such devices as smartphones.

According to a report in the Japanese business daily Nikkei, Apple is looking to spend $479 million for Renesas' 55 percent share of Renesas SP Drivers, which builds chips that are designed to enhance the display image and battery life in devices that use small and midsized LCDs. Renesas SP is a joint venture between Renesas, Sharp and Powerchip, a Taiwan-based semiconductor maker.

According to Nikkei, officials with Sharp—which owns about 25 percent of the joint venture, would sell its shares to Apple if the mobile device giant is willing to buy it following its purchase of Renesas' share. Renesas SP owns about a third of the market for drivers and controllers for the smaller LCDs. The chips account for about 10 percent of a device's battery usage, the report said.

Apple officials hope to close the deal this summer, according to the newspaper. Apple is not commenting on the report.

The Nikkei report comes at a time when Apple is in a fierce competition with smartphone makers that run Google's Android operating system. According to market research firm ComScore, Apple was the top smartphone manufacturer in January, with 41.6 percent of the OEM market share. Samsung was number two, and LG Electronics number three. However, Android was the top smartphone platform in January, with a 51.7 percent share. Apple was second, at 41.6 percent.

Meanwhile, IDC analysts reported in February that Android and Apple's iOS operating systems were in 95.7 percent of all smartphones shipped in the fourth quarter 2013. However, while worldwide shipments of smartphones passed the 1 billion mark in 2013, the analysts said the time of double-digit annual growth rates will come to an end in the coming years, which leaves Apple and Google in competition in a maturing market.

The Nikkei report speculated that given the increasingly competitive market and the importance of image display quality, Apple officials appear to want to bring the development of smartphone displays into the fold rather than relying on third-party manufacturers.