Apple To Invest $1 Billion In Sharp iPhone, iPad LCD Factory?

Just recently we reported on the apparent delayed release of Apple's next generation iPad due to production constraints with display suppliers Samsung and LG. Now, according to the latest rumour, Apple will be investing $1 billion in a new Sharp factory that will produce screens for Apple's iPhone and iPad devices.

Supposedly, the screen manufacturers were facing difficulties in producing the high resolution displays for the purported iPad 3, failing to meet Apple's requirements.

Analyst David Rubenstein of MF Global, wrote about the possible investment in a sales note to clients this Wednesday, "We think it is highly possible that Apple will make an investment in Sharp's Kameyama plant to the tune of around $1 billion in order to secure stable supply of screens for iPhones and iPads." The proposal prompted a rise in the Japanese company's share price by around 2 per cent, Reuters reports.

In June Sharp announced it would be shifting its focus from TV displays to small and medium-sized panels at one of its major plants, in light of the growing smartphone and tablet sectors.

At present LG and Samsung can offer cheaper production of displays, though the recent issues with the iPad 3 panels appear to be due to technical expertise. Furthermore, the purported new plant would enable Sharp to increase capacity and thereby reduce production costs.

Apple was reportedly very disappointed with its LCD suppliers in the first half of this year, who were said to be the cause of the chronic iPad 2 supply issues which were so well publicised in the media.