Japan Display to sell LCD factory to Sharp and use the cash to pay back Apple
Japan Display to sell factory to Foxconn's Sharp
Apple to build a new LCD plant. With smartphone manufacturers-including Apple-turning away from LCD, JDI's new factory was running at only 50% of capacity. According to the Nikkei Asian Review, on Friday Japan Display announced that it will sell a smartphone display factory and the land it sits on to Sharp for 41.2 billion yen (the equivalent of $386 million). The Hakusan LCD factory along with equipment that will be sold to a customer believed to be Apple, will bring Japan Display $668 million while at the same time cutting excess capacity that has negatively impacted its earnings. This specific factory has been idle since 2019.
The facility was supposed to have been sold by the end of this past March but the global pandemic caused the plans to change. When the factory was built, Apple covered most of the 170 billion yen cost ($1.61 billion USD) of the facility. Production started in late 2016 with up to seven million smartphone panels manufactured each month. As time went on, the number of panels churned out by the factory declined on a monthly basis. Japan Display will use the funds it receives from the sale of the plant to pay back Apple for the prepayment it made toward the facility.
Sharp, which is owned by iPhone assembler Foxconn, will rent the necessary equipment from Apple that will allow it to produce LCD displays for older iPhone models. Sharp also expects to use the facility for developing and producing the next generation of displays including microLED screens which use millions of tiny light-emitting-diodes to produce a sharp display (no pun intended). Sharp does plan to spin-off its LCD panel business in October.