With the prospects of the financially-battered Japan Display (JUI) to secure new sources of funds in the Japanese market becoming dim after the company reported its fifth consecutive yearly net loss for fiscal 2018 recently, Suwa Investment Holdings, a consortium formed by Taiwan- and China-based companies, is likely to become a major shareholder of JDI through a conditional bailout deal, Digitimes Research believes.
If the deal is finalized, the injection of new funds from Suwa would enable JDI to ramp up its production of OLED panels using an evaporation process that will help the firm enhance its presence in the automotive panel market and its ability to grab OLED panel orders for Apple’s smartwatches and other mobile devices.
JDI was originally one of the major suppliers of LTPS TFT LCD panels for the production of Apple’s iPhone devices. However, the rise of China’s flat panel industry, increasing market competition and Apple’s shift to using OLED panels since 2018 have combined to bring the misfortune to JDI.
In response to a prospect that Apple might begin to adopt OLED panels for all of iPhone devices from 2020, JDI has set up a trial 6G OLED line using an evaporation process. Since the company is a latecomer to the OLED panel segment as compared to Samsung Display and the risk is high for the need to commit high investments, JDI has found itself in difficulties trying to secure new funds from INCJ, Sony and other shareholders.
If JDI’s restructuring plans meet the requirements of the potential investor Suwa, members of the consortium, including Taiwan’s touch panel maker TPK Holding and China’s Harvest Tech Investment Management are likely to ink cooperation agreements with JDI for the production of LCD and OLED panels.
Leveraging JDI’s leading market position in the automotive LCD panel sector, the joint efforts by the consortium and JDI will help them step into the automotive OLED panel segment and secure a large chunk of touch panel orders for Apple’s mobile devices.―Digitimes