What you need to know
- Japan Display is a major supplier to Apple.
- Apple was planning on investing $100m to help the company.
- That sum appears to be doubling to $200m.
Following the news that an injection of cash into Japan Display is no longer happening, the company says that it hopes to seal a new deal this month. That deal is worth around $470 million with Apple believed to be part of it.
Apple uses the struggling company – which has made losses for the last five years – as a provider of LCD units. Those displays then go into iPhone XR and iPhone 11 models. Apple calls the displays Liquid Retina, and the loss of Japan Display would mean a switch to an alternate supplier. Instead, it's just going to prop this one up.
Japan Display chief executive Minoru Kikuoka told Reuters that the company is "close" to a deal that it will be able to "cement" this month. That deal will be made up of multiple investors, and sources tell Reuters that Apple will be a big one.
Japan Display has said a major client, which sources with direct knowledge of the talks have said is Apple, intends to invest $200 million, double the amount it previously planned. Hong Kong-based Oasis Management will also contribute $150-180 million. A Japan Display supplier and other funds are also set take part.
Japan Display's main issue in recent years has been the industry's focus on OLED, rather than LCD. The company doesn't have any OLED manufacturing capabilities right now, although that could change in the future.
It's possible that Apple sees Japan Display as a future OLED manufacturer, removing its need for Samsung. However, Japan Display will only look to moving away from LCD and towards OLED once the bailout has come through.
"We are not planning to make capital investments on our own for OLED," he said, adding that excessive capacity for LCD production has drained the company's balance sheet and that any discussions on OLED for smartphones would come after a bailout was in place.
The clock is ticking.