According to Nikkei Asian review, Apple is planning on buying Japan based Renesas Electronics Corporation's stake in a division that designs chips for smartphones.
This acquisition might help Apple in the long run with improvements to their image acuteness on displays and even battery life.
Apple is expected to acquire majority stake in Renesas with 55 per cent stake worth 50 billion yen (or $479 million), claims Nikkei.
Apple's biggest competition comes from Samsung, especially with their giant screen size and display quality, which could precisely be the reason why Apple is buying this chip manufacturer. This deal would help Apple compete with Samsung and the rest of the competitors, claims BGR.
As per reports, majority of the unit's 200 plus employees in Japan would be retained.
For those who are unfamiliar with Renesas SP, it is the world's leading producer of drivers and controllers for small and mid-sized LCDs, with roughly one-third of the market share.
Their chips are used to determine display quality and performance. In addition, the chips can be used to estimate phone's energy efficiency.
Renesas Electronics owns a 55 per cent stake in the chip business, while Sharp Corporation has 25 per cent stake and the rest of 20 per cent is owned by Powerchip. If rumors were true, Sharp is expected to sell all its shares in Renesas SP to Apple.
Although Apple is dependent on multiple suppliers for hardware components, it buys all of its liquid crystal display chips for iPhones from Renesas SP. This emphasizes the significance of this company to Apple.
In 2013, Apple's share of global smartphone shipment stood at 15.2 per cent, which is significantly lesser than the Samsung's share, this explains the need for Apple to concentrate on the areas where they can improve and do better in the long run, according to Nikkei Asian Review.
The change in Apple's strategy in the recent years to bring its suppliers/vendors under its purview is evident from the recent $578 million deal with GT Advanced, which is expected to provide Apple with sapphire.
Post this news, the shares of Renesas surged 6 per cent to 831 yen, apparently this is the highest closing rate since March 2011, Bloomberg claimed.