Renesas Surges After Report of Sales of Unit to Apple

TOKYO--Shares of chip maker Renesas Electronics Corp. surged in trading Wednesday after a report that Apple is considering buying that a unit of the company that designs chips for smartphone displays.

Apple has its eye on Renesas SP Drivers, a joint venture with Sharp Corp. and Taiwan's Powerchip, Japanese business daily the Nikkei reported. Apple is said to be seeking Renesas' entire 55% stake for an estimated Yen50 billion ($479 million), the daily also said.

In early trading on the Tokyo Stock Exchange, the chip makers shares surged over 10% at one point compared with a 0.7% gain in the benchmark Nikkei Stock Average.

Renesas said in a statement that the report was not based on something that the company had announced, although it was exploring various options with the unit.

Although the reported monetary value of the deal is not that large in terms of tech M&As, Renesas has been struggling in recent years. It currently expects to log a Yen21.8 billion net loss for the just-ended fiscal year after racking up a massive Yen167.58 billion loss a year earlier.

The Nikkei report described Renesas SP as the world's leading producer of drivers and controllers for small and midsize LCDs, with a market share of around one-third. It also said that Sharp owns 25% of the venture, with Powerchip, which handles manufacturing, holding the remaining 20%.

Write to Shawn Schroter at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires