Japan Display is exploring mass production of next-generation organic electroluminescent panels for smartphones at an existing domestic plant, the CEO of a Chinese-Hong Kong consortium that has agreed to bail out the troubled Apple. supplier said.
As Japan Display sees fast production of OLED panels as the pillar of its growth strategy, Winston Lee, CEO of Suwa Investment Holdings, who is set to join the Japan Display board, said making them at its Hakusan plant in Ishikawa Prefecture will allow the product to hit the market within two and a half years.
“To build a full OLED production plant in China will take three to four years before the product comes off the line. To build in Hakusan, it may take only two to two and a half. The cost at Hakusan would be half or less,” Lee said in an interview with Kyodo News in Tokyo.
“We don’t have three or four years to wait for JDI’s OLED to reach the market. Our major customer cannot wait that long,” Lee said. “The market changes rapidly, the Chinese OLED manufacturers will eventually catch up.”
Japan Display agreed earlier this month to receive a capital injection of up to 80 billion yen ($752 million) from Suwa Investment, a consortium of China’s Harvest Tech Investment Management Co. and Hong Kong’s Oasis Management Co.
Under the bailout deal, which will make Suwa a major shareholder of Japan Display, Lee has been nominated as director at the struggling Japanese maker, pending shareholders’ approval. Currently, the state-backed fund INCJ. is the biggest shareholder with a stake of around 25 percent.
In the April-June period, Japan Display logged a net loss of 83.27 billion yen and slipped into negative net worth amid falling demand for smartphones. In the last fiscal year that ended in March, the company incurred a net loss for the fifth straight year, affected by declining demand from Apple.
The maker of liquid crystal display panels for the iPhone XR model is counting on the expected boost in global demand for the high-tech OLED displays for use in next-generation smartphones and televisions.
Apple is also expected to provide financial aid to the cash-strapped manufacturer through the Chinese investment fund.
Lee was also optimistic that Japan Display will see no difficulties in funding its new revival plans, including the mass production of OLED panels, because of their technological superiority.
“When you are an Apple supplier, it means your product is the best because they take the best product only,” Lee said.
After Japan Display is restructured financially with the capital injection, “There would be investors’ interest in JDI more than ever before,” he said.
OLED panels do not require the backlight used in liquid crystal display panels to emit light, thus enabling panels to be thinner and consume less power.
South Korea’s Samsung Electronics Co. is the dominant in the market, with many Chinese manufacturers racing to mass-produce them while ensuring quality.
Japan Display was established in 2012 from the merger of the display operations of Sony., Hitachi and Toshiba. with support from the government-backed INCJ.