Struggling iPhone display-maker suffers another big blow

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iPhone XR
Apple won't give up on JDI.
Photo: Apple

An effort to save struggling LCD manufacturer Japan Display (JDI) has reportedly been scrapped.

The firm leading the bailout with a ¥63 billion ($557 million) investment this week pulled out of a potential deal, according to people familiar with the matter.

The future of JDI now looks uncertain — but strong demand for iPhone 11 is helping its bottom line.

Apple’s switch from LCD to OLED technology for flagship iPhone models has left JDI in a tough position. The company continues to make LCD panels for Apple, but in significantly smaller quantities.

JDI confirmed earlier this month that it plans to start producing OLED screens, but not for another two years. And it is beginning to look like JDI may no longer be around by then.

JDI bailout looks uncertain

Chinese firm Harvest Tech Investment Management was leading a consortium that planned to save JDI with an ¥80 billion rescue package.

It was to cough up ¥63 billion of its own money, which would be combined with ¥10 billion from Apple, and another ¥7 billion from Hong Kong’s Oasis Management.

Sources for Nikkei Asian Review now say Harvest has “shelved” its investment.

The bad luck continues

JDI “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,” the report reads.

It’s not the first time a potential JDI bailout has fallen through. The company first arranged a deal with three companies from Taiwan and mainland China, but two of those pulled out back in June.

The latest effort, announced by JDI in August, came just before the display-maker reported its largest-ever quarterly net loss.

What now for JDI?

JDI isn’t out of hope just yet. A ¥20 billion investment from Innovation Network Corporation earlier this month, coupled with strong demand for its iPhone 11 displays, will keep it afloat for now. And Apple may still be prepared to help.

A separate report from The Wall Street Journal suggests Apple could be willing to double its offer to ¥20 billion. But without other companies willing to step in and make up the ¥63 billion pulled by Harvest, it may not be enough long-term.