Business

Japan Display looks to road ahead with automotive displays

by Kazuaki Nagata

Staff Writer

Japan Display Inc. has been on a rough road for the past four business years, during which the Tokyo-based display manufacturing giant has faced an uphill battle in smartphone panel markets and ended each year with a net loss.

Last year was especially devastating, with a record ¥247.2 billion net loss. Yet JDI says it is crafting a strategy to turn around the loss-making trend and strengthen its competitiveness. Some major pillars of that endeavor include taking advantage of the growth potential in automotive displays and a quicker decision-making process under its new in-house company system.

Digital displays are increasingly integrated into vehicle interiors these days and demand is only expected to climb. “If you look at the technologies, the interior will drastically change — meaning how you are using the display today and position of the display today. Now you have to estimate how it will change,” which is JDI’s strength, said Holger Gerkens, who heads JDI’s automotive display business.

Indeed, more cars have been equipped with a variety of electric panels, such as head-up displays that show key driving information in the driver’s line of sight, center consoles that are placed in the vehicle’s instrument panel, and mirror displays.

According to Fuji Chimera Research Institute’s report in 2016, it was estimated that the shipment of touch panels for automotive interiors would grow 8 to 10 percent from 2017 to 2021 every year. But unlike smartphone panels, which are mostly flat and rectangular, Gerkens said automakers want more “design-oriented” components.

For instance, rather than just putting a flat display on a center console, design oriented display components may be curved and embedded, in line with the design. “If you look at the future where displays are getting bigger and the interior is getting more design oriented, (this) means rectangular flat (panels) might disappear one day,” said Gerkens in an interview last week at the JDI’s headquarters.

Those elaborate displays are not easy to manufacture, so this will be an advantage for JDI, he added. In addition, the auto industry is going through a huge shift with a rise of self-driving technology. If this technology spreads, how people spend time in cars could change a lot, said Gerkens. “This means that the interior has to change quite dramatically. Therefore, displays also will change quite dramatically in the future,” he said.

He said JDI’s strength is in how displays will be used in the future and proposing ideas to customers while boasting the technology to manufacture panels with specifications and design to match customers’ needs.

JDI reportedly has the largest share of the global auto display market, at 19 percent.

By leading the growth of the market, JDI aims to nearly double its sales in the auto display business within five years. In the last business year, which ended in March, JDI saw sales of over ¥100 billion in the automotive display segment. Gerkens said the firm aims to boost the figure to ¥190 billion in five years. Japan Display has heavily relied on the smartphone panel business, with about 78 percent of its sales coming from that segment in the last business year. But it has faced tough competition with Chinese rivals that heated up price battles, while the growth of smartphones has slowed in recent years.

Asked whether JDI is concerned that the same thing could happen to the auto display business, Gerkens said it’s always important to watch what competitors are doing, but JDI’s battlefield is more around displays that are used for high-end auto lineups.

Requirements for such displays from automakers are different, so product proposals, the technology involved and manufacturing capability are demanding, said Gerkens. Thus, the auto display and smartphone panel markets are quite different, he added.

The fact that JDI started a new organizational structure is also a plus, said Gerkens.

The firm divided up three of its businesses — auto display, display solutions and mobile — and turned them into in-house companies to give them more independence.

“This makes everything much easier in day to day operation,” said Gerkens, adding that quicker decision making is a noticeable change and is critical, as display market trends change quickly. “I can make the decision together with my team whenever… we need to make a quick decision. We can do it within one to three days, which was not possible before,” he said.