Synaptics to buy iPhone display chipmaker for $475 mln

Wed Jun 11, 2014 4:55am IST

Related Topics



REUTERS - Touchscreen chipmaker Synaptics Inc said it would buy the sole supplier of display chips for the iPhone for $475 million, potentially winning back Apple Inc as a customer.

Synaptics's shares jumped 19 percent in extended trading after the company also raised its revenue forecast for the fourth quarter ending June 30.

Reuters had reported last month that Apple had failed to make progress in talks to buy Renesas Electronics Corp's majority stake in the Japanese chipmaker Renesas SP Drivers Inc, paving the way for Synaptics to strike a deal.

Synaptics would integrate its touch technology with Renesas' display drivers into one chip, saving manufacturing costs, Feltl & Co analyst Jeffrey Schreiner said.

"There is no one else that can do touch display driver integration right now. There is no other competitor."

Synaptics, whose chips are used in Samsung Electronics Co Ltd's devices such as Galaxy S5 smartphones and Galaxy Note 3 phablets, was once itself a supplier to Apple.

Renesas Electronics holds a 55 percent stake in Renesas SP Drivers, while display maker Sharp Corp has a 25 percent stake and Taiwan's Powerchip holds the remaining.

Synaptics said on Tuesday that the deal was expected to immediately add to adjusted profit after its expected close in the fourth quarter.

Renesas SP Drivers posted revenue of about $650 million and cash flow of about $100 million for the year ended March.

Synaptics raised its fourth-quarter revenue forecast to $300-$310 million from $275-$295 million, citing better-than-expected sales of mobile and PC products.

The growing popularity of using fingerprints to unlock mobile phones and other devices is also expected to drive growth at Synaptics.

The company, which competes with Atmel Corp and Cypress Semiconductor Corp, is scheduled to report fourth-quarter results on July 31.

Synaptics's stock were at $78.45 in extended trading after closing down 1.3 percent at $66.52 on the Nasdaq on Tuesday. The stock has gained 28 percent so far this year.

(Editing by Savio D'Souza)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Social Media

Reuters Showcase

New Device

New Device

Facebook's Oculus unveils new virtual reality prototype device.  Full Article 

Slow Rollout

Slow Rollout

Los Angeles iPad rollout for schools slowed by technical challenges - report.  Full Article 

CEO Watch

CEO Watch

When music stops for Oracle CEO dance, Catz may grab Ellison's chair - analysts.  Full Article 

New iPhones

New iPhones

Apple faithful line up for latest, larger iPhones  Full Article 

Cutting Jobs

Cutting Jobs

Microsoft lays off 2,100 as part of earlier job cut plan.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage