Apple may throw a lifeline to struggling iPhone display-maker

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iPhone sales
Japan Display currently makes iPhone XR displays for Apple.
Photo: Apple

Apple may help out struggling display-maker Japan Display, a new report claims.

Japan Display, which makes screens for the iPhone XR and an upcoming Apple Watch model, suffered a devastating blow this week. After appearing to have sorted out a bailout from a Chinese consortium, several members dropped out.

As with many suppliers, Japan Display relies on its Apple business. Around half of its revenue comes from Cupertino, according to the company’s financial reports. Now, Apple may step in to throw the company a lifeline.

Apple previously supplied some funding for Japan Display to build a factory in Japan to make iPhone panels. Japan Display agreed to pay back Apple in yearly increments of 20 billion yen ($184 million).

As of this March, Japan Display still owes Apple 100 billion yen. To throw Japan Display a potential lifeline, Apple might renegotiate the repayment terms.

According to The Wall Street Journal (paywall):

“While Apple has agreed to loosen the repayment terms, prospective investors in Japan Display are asking for further concessions, including waiving some of the debt outright, injecting new cash of up to [20 billion yen] and guaranteeing orders to Japan Display for this year and next year, said people involved in the talks. Apple has signaled it could consider the requests, they said.”

Japan Display slow to move to OLED

One of the challenges Japan Display faces stems from its previous insistence on sticking with LCD technology. This came as the rest of the industry switched to OLED displays.

While Japan Display now embraces OLED (its new screens for the 2019 Apple Watch will be OLED), it is considered far behind competitors. Because Apple supposedly will ditch LCD iPhones next year, some prospective investors worry abut what this will mean for Japan Display’s future.