A state-backed fund is considering lending more than ¥70 billion ($630 million) to struggling Japan Display Inc. to help it boost production of interior display screens for vehicles, sources close to the matter said.
The loan from Innovation Network Corporation of Japan would be given to enable the manufacturer to develop new liquid crystal display products to reduce its dependence on the volatile smartphone business, the sources said Friday.
Cash-strapped Japan Display has been depending on short-term loans from banks to stay afloat since spring. The state-backed corporate turnaround fund initially planned to support the company by providing up to ¥50 billion, but has decided to raise the amount in hope of fostering Japan Display’s growth, according to the sources.
Japan Display was formed in April 2012 through the government-backed merger of ailing display units that belonged to Sony Corp., Toshiba Corp. and Hitachi Ltd.
The performance of Japan Display’s LCD panel business has deteriorated due to the slowdown in iPhone sales by Apple Inc., one of its major clients.
Japan Display posted a net loss of ¥16.7 billion for the past six months through September. The company plans to cut more than 4,700 jobs, or 30 percent of its workforce in the business year through March, while streamlining operations in Taiwan.
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