Japan Display Inc. said it has received a promise from a government-backed fund for financial support, with the maker of smartphone displays facing a sales slump.
Japan Display Chairman and Chief Executive Officer Mitsuru Honma said in a news conference Tuesday that the Innovation Network Corp. of Japan (INCJ) has told his firm that it will provide “full support” to the supplier for Apple Inc.
The aid from the fund, which is already the biggest shareholder in Japan Display, could amount to tens of billions of yen, including investment for production of next-generation organic electroluminescence panels. Honma was mum about details of support from the INCJ.
Japan Display has been depending on short-term loans from banks against a backdrop of sluggish sales of displays to smartphone makers in countries such as China.
The company has been asked by its lenders to improve its financial health, but it is uncertain whether the firm can stay competitive against its global rivals in such fields as organic EL displays, in particular those of South Korea.
Honma’s remarks came after Japan Display announced that it posted an operating loss of ¥3.4 billion for the April-June quarter against a year-earlier profit of ¥2.2 billion.
Japan Display also logged a net loss of ¥11.7 billion during the three months through June, expanding substantially from the ¥461 million loss of the previous year. The company posted a net loss for the third straight year for the quarter.
Sales plunged 29.2 percent from a year earlier to ¥174.3 billion, hurt by slower sales of iPhones.
Japan Display was formed in a government-backed deal in 2012 from the ailing display units of Sony Corp., Toshiba Corp. and Hitachi Ltd.
The INCJ had aimed to merge Japan Display with the liquid crystal display unit of Sharp Corp. But Sharp, another struggling electronics maker, has decided to restructure under support from Taiwan’s Hon Hai Precision Industry Co., known by its trade name Foxconn.
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