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Samsung Takes 3% Stake in Sharp, Key Supplier of iPhone and iPad Screens

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Original poster
Apr 12, 2001
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Samsung has paid $112 million for a 3% stake in LCD screen manufacturer Sharp, a key supplier of LCD screens to both Samsung and Apple, reports The Wall Street Journal.

Sharp currently holds the technical lead in the manufacture of large-screen LCD panels, enabling it to produce TV screens bigger than 60 inches at a lower cost than other manufacturers. Despite this advantage, the company has been struggling financially over the last 18 months, laying off 11,000 staff and mortgaging key assets.

Sharp has been desperately seeking external financing to keep itself afloat, having received bank bailouts and receiving a $120 million investment from Qualcomm late last year. Foxconn was also set to make an investment in Sharp, but that deal has fallen apart as Sharp's financial picture has continued to deteriorate.

Sharp supplies LCD panels to both Apple and Samsung, including both iPhone and iPad screens, and a WSJ blog suggests that Samsung may gain priority in future supply deals.
Monex market analyst Toshiyuki Kanayama said a Samsung-Sharp tie-up could "help Sharp to at least raise the efficiency of its panel-producing plant, as it will ship products to Samsung, whereas it had prioritized supplying components for Apple."

Samsung's bid to turn Sharp, once a major competitor, into an ally, shows how serious it is in winning a global battle with Apple for dominance in the lucrative market for mobile devices.
Samsung has been focusing its own screen manufacturing efforts on OLED technology, with analysts observing that closer ties with Sharp would help the company outsource more of its LCD production.

Article Link: Samsung Takes 3% Stake in Sharp, Key Supplier of iPhone and iPad Screens
 

furi0usbee

macrumors 68000
Jul 11, 2008
1,781
1,264
I don't understand why Apple doesn't take, say, a 30% stake in Sharp... done.
 
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turtlez

macrumors 6502a
Jun 17, 2012
977
0
Sounds like Samsung is trying to buy competition (Apple supplier). Playing their cards deviously but rewarding.
 
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notthedark

macrumors newbie
Feb 27, 2013
23
45
Picturing bald Samsung CEO sitting in a giant leather chair stroking a white cat.
 
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justperry

macrumors G4
Aug 10, 2007
11,262
7,350
I'm a rolling stone.
I don't understand why Apple doesn't take, say, a 30% stake in Sharp... done.

Apple should pay fair prices for their components, if that would be the case then companies like Sharp amongst others would not have to cut 1000s of jobs.
Pays unfair low prices for components, sells for a premium.
Yes, yes, I know that's how businesses work, but still.
 
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Squilly

macrumors 68020
Nov 17, 2012
2,260
3
PA
Don't see why Samsung would help a competitor.... even if it's due to financial issues.
 
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mankar4

macrumors 6502a
Aug 23, 2007
624
0
USA
This is how it should work: The industry should bail itself it out. Sharp is too big to fail, and Samsung helps to bail them out, in exchange for increased oversight by Samsung in the form of partial ownership.
 
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magamo

macrumors 6502
Apr 6, 2009
420
14
I don't understand why Apple doesn't take, say, a 30% stake in Sharp... done.

Apple is a customer of Sharp while Samsun is more of a competitor as another LCD screen manufacturer. Apple's suppliers like Foxconn may be interested in buying shares of Sharp. But Apple wouldn't benefit as much, especially when Sharp isn't financially healthy.
 
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HockeyMike

macrumors newbie
Mar 6, 2013
8
0
Apple has secured long-term agreements

Apple has already secured long-term agreements that will provide them product for production into 2015. They don't need to invest in Sharp at this point. Besides they are about to launch a TV product and it might bring unwanted scrutiny from the FTC on owning a TV manufacturer if they bought 51% of Sharp.
 
Comment

x86isslow

macrumors 6502a
Aug 10, 2003
889
10
USA
Apple should pay fair prices for their components, if that would be the case then companies like Sharp amongst others would not have to cut 1000s of jobs.
Pays unfair low prices for components, sells for a premium.
Yes, yes, I know that's how businesses work, but still.

So you're saying Sharp is doing poorly because they have a long term contract with Apple?

We all know the problem: The strong yen, the March 2011 earthquake and tsunami, and the Thai floods have made it impossible for the Japanese to compete against their more nimble rivals from South Korea.
 
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Popeye206

macrumors 68040
Sep 6, 2007
3,148
836
NE PA USA
Interesting move by Samsung. Maybe little moves like this might wake the sleeping bear at Apple again???? I hope so.
 
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0815

macrumors 68000
Jul 9, 2010
1,745
828
here and there but not over there
Don't see why Samsung would help a competitor.... even if it's due to financial issues.

They probably need some competition to be alive and somewhat healthy so that they don't get in trouble for having a monopoly and getting in potential trouble for being accused of abusing it.

Same way as it was back in the days a smart move of Microsoft to inject some money into failing Apple - they needed that competition to be alive and breathing to protect themselves from possible law suits.
 
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justperry

macrumors G4
Aug 10, 2007
11,262
7,350
I'm a rolling stone.
Comment

0815

macrumors 68000
Jul 9, 2010
1,745
828
here and there but not over there
I don't understand why Apple doesn't take, say, a 30% stake in Sharp... done.

Yes, sounds like that would be a smart way of securing the access. But I guess Apple would rather have full control (owning the whole process) - wonder if they some day might use their cash to build (or buy) their own factories for all/most the parts they need.
 
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szw-mapple fan

macrumors 68000
Jul 28, 2012
1,975
1,758
Apple is a customer of Sharp while Samsun is more of a competitor as another LCD screen manufacturer. Apple's suppliers like Foxconn may be interested in buying shares of Sharp. But Apple wouldn't benefit as much, especially when Sharp isn't financially healthy.

Yeah, but apple has, like, a 100+ biilion in cash right now. It wouldn't hurt to use a little of that cash to have more control over a major manufacturer.
 
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x86isslow

macrumors 6502a
Aug 10, 2003
889
10
USA
only $160 billion more to go

I'd rather see Apple buy out Einhorn and the other investment sharks and take the company nearly private so they don't have to deal with absurd pressures to sacrifice long-term success for short-term share prices.
 
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