Japan Display to restructure itself as an OLED producer?

Japan Display to restructure itself as an OLED producer?
For Japan Display, the company is in a rather tough financial condition. Even though smartphones continue to sell, Japan Display's LCD panel business for the connected devices cannot make up for the company's late entry into OLED displays. And even Apple, which has stood by its LCD screens since the unveiling of the very first iPhone in 2007, is experimenting this year with one of its handsets. The tenth-anniversary Apple iPhone 8 will likely become the first iOS powered device to carry an OLED screen, leaving the Apple iPhone 7s and Apple iPhone 7s Plus to carry on this year with LCD panels.

Next year,  Apple apparently will continue to source the vast majority of its OLED from Samsung. It is also working with LG to develop that firm's capabilities to supply Apple with enough OLED to cover the production of future iPhone models. As for Japan Display, moving away from its bread and butter LCD screen is going to result in a shock to its system. While the company was able to score some orders from Apple a few years ago, the industry wide move to OLED has the potential of leaving JDI out in the cold. 3,500 Japan Display employees could end up out of a job following this restructuring. Japan Display is owned by the LCD divisions belonging to Sony, Hitachi and Toshiba. 

One of the big advantages of using  OLED is that backlighting is not required like it is on LCD. This allows less power to be used, and when displaying the color black, all pixels are merely turned off. Additionally, the color images supported by OLED panels are usually quite vivid. With a deep, true black image found on OLED screens, more and more manufacturers are moving away from LCD panels.

Tomorrow is the big day for Japan Display as the company will hold a board meeting. On the agenda is this massive restructuring being proposed. JDI is said to be seeking 100 billion Yen ($905.1 million USD) from its creditors. Altogether, if Japan Display's board agrees to make the company over as a provider of OLED screens, you can expect the firm to lose more than $150 billion Yen ($1.35 billion USD) for the 12 months ending this coming March. After that initial period of red ink, the company's fortunes could start to improve.

source: Reuters

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11 Comments

1. PhoneCritic

Posts: 1354; Member since: Oct 05, 2011

Sorry to hear about the people losing their jobs here. That's not a good thing as it was of no fault of their own. That being said Japan display relying on Apple solely to fill their big orders was a bigger blunder - the money may look good at that point but you should always be looking to the next tech advancement. Now no more Apple and now Japan display is in trouble, It happen with Imagination Labs and there GPU it happen with the sapphire glass company etc.. Companies that do business with Apple have to learn to diversifies and have multiple revenue streams rather than one. Apple does this its self by trying to use multiple vendors to built certain components and not relying on one vendor ( unfortunately it maybe that some vendors don't have the capacity or diversity as others).

2. nh1402

Posts: 138; Member since: Oct 30, 2013

JDI already have a stake in JOLED which was started a few years back now, it wasn't created for smartphones sizes, more for tablets and other areas. They'll probably merge into that and restructure

3. pendragon0202

Posts: 164; Member since: Feb 23, 2015

It is kinda little late for them to jump into oled game. It is not just a matter of whether you have the tech. You must compete in volume and price and that is where JDI cannot compete with giants like Samsung. How can a company which relies on life support on bank loans or government subsidy compete when the price you have pay to play in the oled game is setting up equipments and factories costing tens of billions dollars. As rich as Japan is, considering current government debt level and polictical situation where Mr. ABE's support rating going down rapidly, the Japanese government is already being pressed not to waste tax payers money by bailing these money bleeding companies. I think only the Chinese, with the unlimited government fund infusion (possible in communist planned economy) will compete with the Koreans in display oled tech in near future.

5. mixedfish

Posts: 1561; Member since: Nov 17, 2013

Fairly easy to compete against Samsung: don't manufacturer AMOLED.

10. Shamoy

Posts: 112; Member since: Dec 28, 2013

JDI has access to Sumitomo inkjet and vapor deposition tech which makes production costs 30% cheaper than Samsung's AMOLED production tech and JDI has already hit a 70% yield on production. On top of that, JDI has superior LTPS technology for better power savings than Samsung and LG and uses pure RGB. I can agree with you though on the part that relying on bank loans and government support is not a great idea so right now the best idea would be to team up with Sharp (since Sharp hit almost 80% yield rate with Innolux joint venture) and get Sony to invest a good $1 billion since Xperia phones rely on a JDI supply chain. The only issue left is just to produce factories and get access to equipment but I think it would just be better to convert existing factories and production lines into AMOLED lines.

4. Skizzo

Posts: 403; Member since: Jul 14, 2013

A little late to the game, but better late than never. It won't be smooth sailing for a while, but I don't see them dying.

6. dimas

Posts: 3382; Member since: Jul 22, 2014

RIP phone lcd displays?

7. dimas

Posts: 3382; Member since: Jul 22, 2014

RIP phone lcd displays?

11. Lumberjack

Posts: 306; Member since: May 04, 2017

No... JDI has Sony, Huawei, HTC and chinese brands as ckients.

8. HansP

Posts: 542; Member since: Oct 16, 2011

Short sighted greed has ended many companies selling hardware to Apple. Apple is the corporate personification of selfish greed. Pays no taxes, tricks hardware suppliers to invest in production lines they only need for one year, without disclosing any info on when they're changing suppliers. Some times they even cancel order before releasing products, like that U.S.glass manufacturer they bankrupted a couple years ago. I guess, all is well as long as Apple's offshore bank accounts are filled?

9. Amir123a

Posts: 126; Member since: Aug 27, 2016

JDI should have heavily invested in oled development for smartphones 10 years ago but they did not. They invest almost everything in lcd. That is a joke. A smart company should foresee the future as well and be prepared to transfer to a new tech which was oled long ago and still is the best display tech for the foreseeable future.

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