Business / Corporate

Chinese manufacturers eager to ink OLED panel tie-up with struggling Japan Display

Kyodo

Several Chinese manufacturers are interested in tying up with Japan Display Inc. to mass produce next-generation OLED panels for smartphones, a consortium that has agreed to bail out the troubled Apple Inc. supplier says.

“As an independent Japanese company with a recognized leading technology, you can imagine that many companies are seeking to work with JDI, including leading Chinese manufacturers,” Chase Gao, a spokesman of Suwa Investment Holdings LLC, said in an emailed response on Thursday.

“New Chinese OLED producers have complicated financial, technology and marketing issues — and in many cases JDI is a potential solution to their challenges,” Gao said.

Japan Display, which slipped into negative net worth in the April-June quarter, is eager to mass-produce OLED panels — which form a picture via a thin, bendable layer of organic light-emitting diodes — in China as part of efforts to turn around its business. Global demand for the high-tech displays is expected to grow for use in next-generation smartphones and televisions.

OLED panels do not require backlights like liquid crystal display panels, thus allowing them to be thinner and consume less power.

Japan Display said earlier this month it has agreed to receive a capital injection of up to ¥80 billion ($750 million) from Suwa Investment, a consortium of China’s Harvest Tech Investment Management Co. and Hong Kong’s Oasis Management Co. Apple is also expected to provide financial aid to the cash-strapped manufacturer through the Chinese investment fund.

Samsung Electronics Co. is the dominant leader in the OLED market, with many Chinese manufacturers racing to mass-produce them while ensuring quality.

The spokesman said JDI has already achieved a high level of production with “best-in-class performance and specifications,” and is already supplying many major customers.

As part of restructuring measures, Japan Display suspended operations at its Hakusan plant in Ishikawa Prefecture, which makes smartphone displays, in July.

Gao added the consortium “is considering how to restart the operation of (the plant).”

Japan Display was established in 2012 from the merger of the display operations of Sony Corp., Hitachi Ltd. and Toshiba Corp. with support from state-backed INCJ Ltd.