Sharp Stories April 6, 2016

AAPL: 110.96

1.15

It had always seemed obvious that Foxconn’s reason for buying display-maker Sharp was to acquire the capacity to make OLED displays for future iPhones – and a supply-chain report today supports this.

Sharp will set up one 4.5G and two 6G AMOLED production lines with monthly capacity of 13,000, 11,500 and 34,500 glass substrates respectively, with total monthly capacity of 9.85 million 5.5-inch equivalent panels.

While the source is Digitimes, this one seems likely to be at least broadly accurate.

Apple currently used OLED displays only in the Apple Watch, still relying on older LCD displays for the iPhone, but numerous reports suggest that the company plans to switch to OLED screens for iPhones at some point in 2017 or 2018.

Image: OLED display under microscope via Reddit

Sharp Stories March 31, 2016

AAPL: 108.99

-0.57

Foxconn’s acquisition of Sharp likely to reduce Apple’s dependence on Samsung

Foxconn’s acquisition of Japanese display-maker Sharp looks likely to help Apple reduce its dependence on Samsung as it prepares for a transition from LCD to OLED displays.

The WSJ notes that Samsung currently makes 95% of the world’s OLED displays, and that Apple always aims to have multiple sources of components to reduce risk and strengthen its negotiating position.

While Sharp doesn’t currently make OLED screens, it will almost certainly start doing so under Foxconn’s ownership.

Sharp can springboard off its existing technology to develop the screens, says Alberto Moel, a technology analyst for Bernstein Research. The two types use the same backbone, but OLED screens are topped with a layer of organic compounds instead of the liquid crystal layer for LCDs. “The first part of the production process is similar,” he said.

Foxconn has long been seeking to expand its role in iPhone production from low-margin assembly work into the more profitable component business.

Apple currently used OLED displays only in the Apple Watch, but is widely expected to switch to the newer display technology in the iPhone in either 2017 or 2018. While Samsung looks set to be Apple’s lead supplier, that’s something the iPhone maker will want to change over time.

Sharp Stories March 30, 2016

AAPL: 109.56

1.88

Deja vu? The Foxconn acquisition of Sharp was almost a done deal a few weeks ago, until Sharp revealed some additional liabilities at the eleventh hour it had not previously disclosed. This meant Foxconn had to go back to the drawing board and re-assess the deal, renegotiating some parts of the contract with Sharp. The initial offer was worth $6.2 billion. Today, the companies announced Foxconn will buy Sharp in a $3.5 billion dollar deal.

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Sharp Stories March 29, 2016

AAPL: 107.68

2.49

Foxconn shares suspended due to “major announcement” expected to be Sharp acquisition

It looks like the on-off acquisition of display-maker Sharp by iPhone assembler Foxconn is back on. The WSJ reported earlier that the two companies have been discussing a significantly lower valuation for the company, and Reuters now reports that share trading in Foxconn has been suspended due to a “major announcement.”

Japan’s Sharp Corp and Taiwan’s Foxconn are set to sign a merger deal this week after repeated delays, with the two sides set to agree on a smaller bailout than originally planned for the troubled Japanese electronics maker, two sources familiar with the talks said.

The deal is expected to be finalised during board meetings by both companies tomorrow for around $2B less than originally discussed, after a rather stormy journey.

Sharp Stories March 15, 2016

AAPL: 104.58

2.06

Foxconn seeking concessions from shareholding banks in attempt to rescue Sharp takeover

The Nikkei Asian Review reports the latest on the on-off-maybe acquisition of display maker Sharp by iPhone assembler Foxconn.

Various potential deals appear to be under discussion with both Mizuho Bank and Bank of Tokyo-Mitsubishi UFJ. These include paying the banks less for the shares they hold, reducing the interest rate payable on a joint loan to Sharp and agreeing that the banks will provide financial support in the event that the feared liabilities do indeed materialize after the deal is done.

It was initially reported last month that the deal had been done before details of potential Sharp liabilities put it into doubt. Negotiations then resumed.

It had been suggested at one stage that Apple may help to support the deal, but as there has been no recent mention of this, we’d say this currently seems unlikely. Foxconn has, however, long played a role in helping keep Sharp afloat.

Sharp Stories March 4, 2016

AAPL: 103.01

1.51

Foxconn’s acquisition of Sharp reportedly back on track after earlier doubts; Apple’s involvement still unclear

Foxconn’s planned takeover of Sharp, to allow it to begin making displays for iPhones as well as assembling them, is reportedly back on track.

First reports of Foxconn’s interest in purchasing Sharp’s display division emerged last September, when it was reported that Apple would come on board as an investor. Foxconn made a $5.3B bid in January, and it was initially reported that the deal had been concluded last week.

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