A recent report from Reuters suggests Apple is investing $1 billion in a new Sharp factory to produce iPhone and iPad displays, in an effort to overcome production constraints with display suppliers Samsung and LG.
However, it seems the story is not entirely accurate, or at least that is what Taiwan industry observers claim, according to AppleInsider. In their opinion, Apple is more likely to "work out a deal with Sharp", paying them $1 billion as a pre-payment for purchasing displays for the iPad tablet. The speculation is based on previous Apple strategies, namely the way Apple worked with supplier LG, purchasing panels instead of investing in the company.
If the story proves to be true, it means Apple would be relying less on Foxconn's Chimei Innolux (CMI) and also on Samsung. CMI has recently started producing LCD panels for Apple's iPad 2, targeting a million iPad displays a month.
However, Apple's main supplier for iPad panels is LG Displays, but just last month it was alleged Apple was replacing LG with Samsung, because of quality issues LG panels were reported to have. Apple was trying to diminish its reliance on LG, by switching to Samsung.
But now, apparently, Apple is switching to Sharp to produce the displays, since both suppliers have failed to meet the production requirements; with the iPad 3 timetable rumoured to have been delayed as a result.