Samsung is taking a 3% stake in Japanese company Sharp, a major Apple component supplier. Sharp will use Samsung’s $110 million investment to show bank lenders that their LCD business continues to be viable. Interestingly, Sharp is not only a long-time partner of Apple, but also a long-time rival of Samsung. The two companies have historically been competitors in both the display panel and television markets. Samsung’s investment signals a change in that relationship, as well as a boon for Samsung, as Min-Jeong Lee And Juro Osawa of the Wall Street Journal report:
For cash-rich Samsung, the move will ensure a stable supply of LCD screens for TV sets from Sharp. The Japanese company is the only LCD manufacturer that currently operates an advanced manufacturing facility—in a separate partnership with Hon Hai—capable of turning out TV panels from the industry's largest sheets of glass. This allows Sharp to lower the manufacturing costs of TV screens larger than 60 inches. Samsung may also rely on Sharp to supply panels for tablets.
Sharp is currently one of the major companies manufacturing displays for Apple iOS devices, and Samsung’s investment could have an effect on that relationship. However, at least in the short term, the impact is likely to be minimal. Samsung is, after all, Apple’s biggest rival in smartphones right now, and Apple relies on Samsung to manufacture the processors for its iOS devices. Of course, Apple could be saying goodbye to Samsung in the near future, but the two have been fierce competitors for years already. Whatever change may take place in the relationship between Apple and Sharp, we’ll have to wait and see what it might be.
Source: The Wall Street Journal