Apple Helps in Japan Display Bailout By Reducing Repayment Rate for Owed Money

Apple has decided to wait for the money that Japan Display owes to it in a bid to help the struggling display maker with its bailout. Japan Display has been a long time LCD supplier for Apple but it has been struggling for years to earn a profit.

The company’s woes have further worsened due to its inability to produce OLED panels as demand for LCD panels have declined. In a bid to revive JDI’s business, a Chinese-Taiwanese consortium of TPK Holding and Harvest Group will be investing around 80 billion yen ($279 million) in the company for a stake of 49.8 percent. The final decision from the Chinese-Taiwanese consortium will be finalized by June 14.

The decision was taken after Apple decided to wait for the money that Japan Display owes them. As per the report, Apple has agreed to reduce the rate of repayment from Japan Display by half for two years. Apple had seemingly invested $1.5 billion in helping JDI set up a factory four years ago. As a part of the deal, JDI was to give Apple a percentage of money from its display sales. Seemingly, JDI still owes Apple about 100 million yen.

Our Take

JDI has previously received a bailout package from the Japanese government. With the company still struggling to set up its OLED factories, I am not too optimistic about JDI’s chances here. There needs to be a top to bottom revamp inside the company and its approach if it wants to remain in the smartphone display business. The demand for LCD panels is only going to decline further and JDI really needs to step up and complete its OLED factory to increase its chances of survival.

[Via Reuters]