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The endless saga of Japan Display continues today, with reports that the bailout is being challenged again – although there is good news for the company in the form of orders for the iPhone 11.
Japan Display has long been a supplier of LCD screens for Apple, but it has been slow to diversify into OLED technologies …
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The story begins in 2016. Japan Display has found that its LCD screen orders have dropped sharply, as smartphone manufacturers are starting the switch to OLED. The company did not have the capital needed to build expensive OLED production lines. She needed a $ 636 million government bailout to keep the company afloat and let it eventually invest in OLED.
Apple has quietly embarked on OLED screens, starting with the Apple Watch in 2015, then with the Touch Bar on the MacBook Pro the following year, and then with its first iPhone OLED, the iPhone X in 2017.
The iPhone maker wanted to diversify its Samsung OLED supply chain as a sole supplier, but the market was becoming more and more competitive, with Sharp, LG and BOE all hoping to conquer the business. Apple. Meanwhile, Japan Display was still struggling to raise the capital needed to produce large scale OLED screens.
A second bailout was announced, initially for $ 723 million, although many figures were then released. Things seemed good for a while, this plan being "confirmed" and the company winning Apple Watch screen orders. Apple has agreed to help the company pending repayment of a $ 1.5 billion loan to the company years ago to fund the production of LCDs.
However, things began to deteriorate when a large sponsor stepped out of the bailout. Apple has agreed to invest $ 100 million to help balance the accounts, but the OLED iPhone screens still seemed distant for at least two years.
Today's episode of the Japan Display saga
Nikkei Asian Review reports that the rescue plan is again in doubt as the company responsible for the rescue plan has withdrawn.
Japan Display, a struggling ACL manufacturer, will not benefit from the financial rescue plan planned by China's Harvest Tech Investment Management. The Chinese group informed the screen maker that it was canceling its plan to contribute to an 80 billion yen rescue package worth 63 billion yen ($ 557 million), announced Thursday many people familiar with the negotiations.
A spokesman for the company, also known as JDI, declined to comment.
This development could send JDI's restructuring plans back to square one. The company has often struggled to develop a restructuring plan and the decision by Harvest Tech Investment Management may worsen the confusion within Japanese society.
It might also cast doubt on Apple's investment because it came from Harvest – although a the Wall Street newspaper The report suggests that Cupertino could increase its stake.
Apple was to invest 10 billion yen in the previous version of the bailout plan and now plans to double that amount to 20 billion yen in light of the withdrawal of Harvest, said people familiar with the plan. Japan Display hopes to retain parts of the previous investment consortium, including Hong Kong hedge fund manager, Oasis Management Co.
The orders of the iPhone 11 would also help.
The display manufacturer probably has no immediate problems. On 3 September, it received a 20 billion yen injection from Innovation Network Corporation of Japan, a public-private partnership and the largest shareholder of JDI. JDI also began supplying LCD screens for Apple's iPhone 11, which supported its results.
Watch this place …
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