Japan Display Inc. plans to streamline its operations in China to cut costs and remain competitive despite weakening demand for smartphone display panels amid a slowdown in the Chinese economy, sources said Wednesday.
The company, which has three plants in China, would concentrate the production of smartphone panels at one of the plants in Shenzhen, Guangdong province, where a number of smartphone makers operate, the sources said.
Japan Display, formed in a state-backed deal in 2012 from the struggling display units of Sony Corp., Toshiba Corp. and Hitachi Ltd., is facing the need for structural reforms after rapidly expanding in China's smartphone market, the world's biggest.
A supplier for Apple Inc.'s iPhones, Japan Display once struggled with intense price competition from Japan's Sharp Corp. and other Asian rivals, but has been recovering.
Sharp, meanwhile, was rescued in May in a ¥225 billion ($1.9 billion) bailout from banks following a slump in its display business and is now looking to accept investment from Japan's public-private fund to accelerate turnaround efforts.