UPDATE 2-Renesas in talks with Apple, others on sale of display chip unit -source


* Renesas restructuring to focus on auto business

* Apple interested, could pay 500 bln yen by summer -Nikkei

* Renesas shares jump nearly 20 pct to 3-year high

(Adds source confirmation on talks with Apple, context)

TOKYO, April 2 (Reuters) - Renesas Electronics Corp is talking with Apple Inc and other potential buyers of a stake in a smartphone display chip unit, as the struggling Japanese chipmaker restructures its business around the automotive industry, said a person familiar with the matter.

Renesas is considering selling its 55 percent stake in Renesas SP Driver which makes semiconductors that control displays, and which sources said is one of several Japanese suppliers of components for Apple's iPhone.

Apple has been tightening control over its supply chain to keep up with main rival Samsung Electronics Co Ltd and stay ahead of fast-growing Chinese manufacturers such as Huawei Technologies Co Ltd.

The U.S. manufacturer was one of a number of companies Renesas met to discuss selling the stake, the source said on Wednesday.

Renesas, which has racked up nearly 650 billion yen ($6.28 billion) in net losses during eight years in the red, said on Wednesday it was considering selling the unit but declined to comment further.

The Japanese company could sell Apple its stake for 50 billion yen by the summer, said the Nikkei business daily, which first reported on the talks with Apple.

Sharp Corp could also sell its 25 percent stake in the unit if requested to do so by Apple, the Nikkei said. Taiwan's Powerchip owns the remaining stake.

Apple did not respond to an email request for comment.

Shares of Renesas surged after the report by as much as 19 percent to 934 yen, their highest in more than three years. They had pulled back by early afternoon to 828 yen, up 5.6 percent, compared with a 1.2 percent rise in the benchmark index.

Renesas, formed from the struggling chip divisions of three Japanese electronics conglomerates, received a 150 billion yen bailout in September from major customers and a government-led fund, countering a bid by U.S. private equity firm KKR & Co LP .

Electronics manufacturers Japan Display Inc and Sharp, along with South Korea's LG Display, are set to make larger screens for Apple's iPhone 6, which is widely expected to be released this autumn, supply chain sources said.

($1 = 103.5750 Japanese Yen)

(Reporting by Tokyo industrial news team and Sruthi Ramakrishnan in BANGALORE; Writing by Edmund Klamann; Editing by Kirti Pandey and Christopher Cushing)