Apple could give struggling supplier Japan Display a boost by investing $100 million in the company. This will offer a valuable lifeline as Japan Display goes through restructuring after a key investment fell through.
Apple currently represents 60% of Japan Display’s sales. Thanks to the deal, it could soon make up even more.
The exact reason for the investment isn’t entirely clear from the twin reports in business paper Nikkan Kogyo Shimbun (via Seeking Alpha) and Asahi. However, it seems that Japan Display could benefit from Apple’s current efforts to shift manufacturing out of China. Apple recently told some of its biggest manufacturers to explore moving factories outside of China.
Japan Display could be one recipient of this as Apple is reportedly giving it additional orders. This is supposedly at the expense of LCD orders from China. The reports do not say which LCD manufacturer Apple would take orders away from.
Giving Japan Display a boost
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 recently, though, it still owes Apple 100 billion yen. A recent Wall Street Journal report said that Apple make renegotiate repayment terms to offer assistance.
Giving Japan Display extra LCD orders would certainly be a short-term assist. But it’s unlikely to be a long-term fix. Apple is switching to an all-OLED lineup of iPhones in 2020. While it would likely continue to manufacturer older LCD models for a while, these will ultimately be phased out.
One of Japan Display’s issues was sticking with LCD technology at a time when everyone else was working on OLED. Fortunately, it is now working in smaller quantities with OLED screens. As a result, Apple has awarded the company OLED orders for an upcoming Apple Watch.