Japan Display looking for funding again
According to the Japanese press, Japanese panel producer Japan Display (6740.JP) is looking to banks and its largest shareholder, the INCJ (Innovation Network Corporation of Japan – a government funded organization) for additional financing of ~ $900m. JDI has faced assembly plant closings in China, and continued losses as it tries to reinvent itself as its largest customer is seen moving toward OLED displays. Japan Display has stated that it will purchase JOLED (pvt), another INCJ company, to enhance its OLED capabilities, but has postponed the closing of the deal twice thus far, with no date currently set, and continues with various forms of restructuring to bring the company back to profitability on a sustained basis.
Japan Display, once the premier LTPS display manufacturer, has fallen prey to the display industry’s massive investment in LTPS capacity, which gave brands much wider options toward choosing display producers, with Chinese LTPS oriented manufacturers gaining share against JDI. As the smartphone market continues to transition toward OLED displays, Japan Display is left to scramble to develop its OLED capabilities in order to remain even a portion of its largest customer’s (Apple – AAPL) business. Given that the development of OLED manufacturing technology has progressed far more quickly in South Korea, despite Japan’s early lead in developing OLED technology, they are playing catch-up to the rest of the industry, and a big step in OLED technology is likely the only way they can stay in competition with other OLED producers. JOLED is said to have developed an OLED manufacturing process based on ink-jet printing, and while JDI continues to struggle to make the JOLED acquisition and remain in business while doing so, JOLED needs to be able to prove that the ink-jet process can be both commercialized and translated to high volume production. The question remains how long banks and the Japanese government, through the INCJ, will keep JDI afloat, with the hope that they will gain some real traction in the OLED space, but it might be that the previous JDI management regime did not react fast enough to the rapidly changing display space to keep the company alive for a sustained period of time.
Japan Display, once the premier LTPS display manufacturer, has fallen prey to the display industry’s massive investment in LTPS capacity, which gave brands much wider options toward choosing display producers, with Chinese LTPS oriented manufacturers gaining share against JDI. As the smartphone market continues to transition toward OLED displays, Japan Display is left to scramble to develop its OLED capabilities in order to remain even a portion of its largest customer’s (Apple – AAPL) business. Given that the development of OLED manufacturing technology has progressed far more quickly in South Korea, despite Japan’s early lead in developing OLED technology, they are playing catch-up to the rest of the industry, and a big step in OLED technology is likely the only way they can stay in competition with other OLED producers. JOLED is said to have developed an OLED manufacturing process based on ink-jet printing, and while JDI continues to struggle to make the JOLED acquisition and remain in business while doing so, JOLED needs to be able to prove that the ink-jet process can be both commercialized and translated to high volume production. The question remains how long banks and the Japanese government, through the INCJ, will keep JDI afloat, with the hope that they will gain some real traction in the OLED space, but it might be that the previous JDI management regime did not react fast enough to the rapidly changing display space to keep the company alive for a sustained period of time.
Figure 3 - JOLED flexible display prototype - Source: JOLED
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