To ensure it has sufficient funds to supply LCD panels to Apple for its new iPhones, Japan Display is planning to raise $517 million through asset sales and third-party share allocations.
Japan Display has long been supplying Apple with LCD panels for use in iPhones. However, the company has been struggling for years to make a profit.
Making matters worse for Japan Display is the fact that Apple is now looking to switch to OLED panels for it iPhones lineup. The company currently does not have the resources or the equipment to manufacture OLED panels on a scale. For this, JDI was exploring options for capital partnerships that would allow it to gain the necessary funds required for investment here.
Thankfully for JDI, the iPhone X did not prove to be as big of a hit as many were expecting. Due to this, Apple has decided to stick to LCD panels on at least one of the three new iPhones it plans on launching this year. Now to supply LCD panels to Apple, JDI is in need of some working capital for securing some inventory. This move will help the company meet its short-term goals but its unlikely to make an impact in the long term.
Apple’s will eventually switch to OLED panels for its entire iPhone lineup, and most Android OEMs have already made the switch to OLED panels for their flagship and premium mid-range devices. With a decline in demand for LCD panels in the next few years, JDI does not look like it is in a good position to transition its factories for OLED production. The struggling display maker had previously received some cash infusion from the Japanese government to help keep it afloat but that did not seem to have made a huge impact.
[Via Nikkei]Like this post? Share it!