The never-ending Japan Display saga continues today, with a report that the rescue plan is once again in doubt — though there is some good news for the company in the form of iPhone 11 orders.
Japan Display has long been a LCD supplier for Apple, but was very late to diversify into OLED…
Background
The story begins back in 2016. Japan Display found its LCD orders falling dramatically as smartphone manufacturers began the shift to OLED. The company didn’t have the capital needed to build OLED production lines, which are expensive to create, so needed a $636 million government bailout to keep the company afloat and let it finally invest in OLED.
Apple took a leisurely journey toward OLED screens, starting with the Apple Watch in 2015, followed by the Touch Bar on the MacBook Pro the following year, and then its first OLED iPhone, the iPhone X in 2017.
The iPhone maker was keen to diversify its OLED supply chain away from Samsung as its sole supplier, but the market was growing increasingly competitive, with Sharp, LG and BOE all hoping to win Apple business. Japan Display, in the meantime, was still struggling to raise the capital needed for large-scale OLED screen production.
A second bailout was announced, initially for $723 million, though with a wide variety of numbers subsequently bandied about. Things looked good for a while as that plan was “confirmed” and the company won orders for Apple Watch screens. Apple agreed to assist the company by waiting for repayment of a $1.5 billion loan made to the company years earlier to fund LCD production.
However, things started unravelling when a major backer exited the rescue plan. Apple agreed to chip in $100 million to help balance the books, but OLED iPhone displays still looked to be at least two years away.
Today’s episode of the Japan Display saga
Nikkei Asian Review reports that the rescue plan is once again in doubt as the company leading the bailout has reportedly pulled out.
That potentially also put Apple’s investment in doubt, as that was coming via Harvest — though a separate Wall Street Journal report suggests that the Cupertino company may actually increase its stake.
A spokesperson for the company, also known as JDI, declined to comment.
The development could send JDI’s restructuring plans back to square one. The company has repeatedly struggled to come up with a restructuring plan, and the Harvest Tech Investment Management’s decision will likely worsen the sense of confusion at the Japanese company.
iPhone 11 orders are also said to be helping.
Watch this space…
Photo: Shutterstock
