Synaptics beats Apple to the punch on Renesas SP Drivers acquisition

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Apple has failed to follow through with its rumored acquisition of the chipmaker Renesas Electronics’ mobile display chip division, Renesas SP Drivers. Reuters reported Tuesday that the iPhone maker has definitely lost its bid to acquire Renesas to Synaptics, a company that builds touchpads and touchscreens for an array of mobile and desktop devices.

The development is especially newsworthy given that Synaptics was once an Apple supplier (the company is not listed on Apple’s list of 2014 suppliers). Basically, this means that the powerful consumer electronics powerhouse has gotten outbid by one of its former suppliers…

Reuters has learned from sources that the potential Apple-Renesas deal collapsed over lack of progress.

Renesas Electronics Corp plans to sell its majority stake in a maker of iPhone display chips to Synaptics Inc, another smartphone chip supplier, according to sources familiar with the matter.

Renesas itself the same day published the following statement on its website:

There were media reports which were published in certain media, reporting that Renesas Electronics decided the direction of selling its subsidiary, Renesas SP Drivers Inc., to an overseas company.

As stated in the Company’s statement, “About the media reports regarding Renesas’ subsidiary, Renesas SP Drivers Inc.” issued on April 2, 2014, the reports were not based on Renesas’ announcement and Renesas SP Drivers’ announcement and they cannot be confirmed or regarded as fact at this time.

Again, the Renesas SP Drivers division builds mobile display chips and is Apple’s only source of liquid crystal display chips for the iPhone.

Sources told the news gathering organization that the talks have failed to make progress, prompting Renesas to “narrow its consideration” to Synaptics. Sony, another Apple supplier, reportedly wanted to devour Renesas last year.

The Renesas SP Drivers buy was meant to bolster Apple’s supply chain and help “improve image sharpness and battery life” on iPhones, according to the Japanese business site Nikkei in April.

According to that report, Apple originally wanted to snap up 55 percent of Renesas while acquiring an additional 25 percent from Sharp. Taiwan-based Powerchip holds the remaining 20 percent stake in Renesas SP Drivers.

The deal should have been closed by the summer.

The Renesas website states that the firm specializes in building LCD drivers for small and mid-sized LCD panels. These chips greatly affect a display’s quality and performance. Perhaps more importantly, LCD drivers are said to account for around ten percent of battery usage.

Had it come through, this deal could have allowed Apple to optimize power consumption on iOS devices by bringing Renesas teams under its own roof.