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Apple might have propped Sharp with a cool $2 billion to ensure future screen tech supply

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Apple might have propped Sharp with a cool $2 billion to ensure future screen tech supply
There were rumors in the summer that Sharp was the laggard when it came to producing the displays in Apple's yet-unannounced gadgets. and that Apple is fronting it some cash for tools and equipment to ensure yields rise up. Sharp had been in dire straits this year, and was desperately seeking investments to keep it afloat, with its TV business down in the dumps.

Meanwhile, other rumors emerged that Apple's chief assembler Foxconn's parent company is trying to build stakes in Sharp, to ensure future supplies of its innovative screen technologies like IGZO, with the knowledge that Apple is betting on the Japanese for the long term. The deal dell through as creditors were giving Sharp the stink eye. Then all of a sudden, Sharp stopped having problems, and said all is well with screen production for Apple's gadgets.

Now Horace Dediu from Asymco is putting two and two together, analyzing where did the $2.3 billion extra CapEx money Apple reported go, and concludes that the unusual outlay for "product tooling and manufacturing process equipment" might have gone straight to Sharp. 

The analyst thinks that Apple might have snatched a whole display production line, and secured it in the form of component prepayments, thus taking it on the balance sheet without alarming Sharp's creditors.

If so, Cupertino kills a few birds with one stone - it ensures continuous supply of screens for its new iPhone and iPad models, diversifies from Samsung and LG as display suppliers, and gains access to Sharp's screen tech, which is at the forefront of LCD development, and might come in handy if/when Apple decides to go ahead with a TV business.

source: Asymco

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