Japan Display to Sell Module Business
Japan Display (6740.JP) has agreed to sell its KOE Taiwan based automotive module business to Taiwan based Wistron (3231.TT) for $72.2m (tentative) in order to reduce its fixed cost burden. Japan Display will continue its manufacturing relationship with Wistron, who has been the company’s mobile display module manufacturer for over 10 years, and through the sale will now outsource the manufacturing of its automotive and industrial display products, although the design and sales of those products will still be done by JDI. We believe JDI’s automotive business represented ~25% of sales in fiscal (March) 2021, with the company’s expectations for that to increase to over 40% in fiscal 2022. As we believe JDI’s automotive design and sales business will remain with the company, that goal still seems within reach.
Wistron is a top 5 EMS that was spun off from Acer (2353.TT) and will easily absorb the JDI module business, continuing JDI’s plans to reduce fixed costs under the company’s 2020 restructuring plan. That plan included the sale of its Hakusan LCD production plant to Sharp () and an ‘unnamed’ JDI customer (assumed to be Apple (AAPL)) for $675m last October, in order to push the company toward positive operating results, which it has not seen since 2014.
Wistron is a top 5 EMS that was spun off from Acer (2353.TT) and will easily absorb the JDI module business, continuing JDI’s plans to reduce fixed costs under the company’s 2020 restructuring plan. That plan included the sale of its Hakusan LCD production plant to Sharp () and an ‘unnamed’ JDI customer (assumed to be Apple (AAPL)) for $675m last October, in order to push the company toward positive operating results, which it has not seen since 2014.
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