Sold
In August of 2011 Japan’s Innovation Network Corporation, a company owned by both the government of Japan and 25 Japanese companies, announced an investment of ¥200 billion ($1.335b US – today’s dollars) in what were the combined display assets of Sony (SNE), Toshiba (6588.JP), and Hitachi (6501.JP), which, nine months later, became known as Japan Display (6740.JP). Over the last almost 13 years the INCJ has invested ¥462 billion ($3.08 billion US) in JDI (debt & equity) to support the company and Japan’s continuing desire to maintain a position in the display industry. Unfortunately, JDI’s former management did not recognize the transition from LCD to OLED that the mobile phone industry was making, and despite its near dominance of that segment years ago, has been unable to maintain such a position of leadership, despite the INCJ’s help.
In 2020 Ichigo (2337.JP), a REIT and asset manager, took over the reins at JDI and has been trying to reshape the company into a profitable entity. It has not been an easy task given the intense competition in the display space and the older LCD fabs that have been part of the company culture. Ichigo has been selling underused assets and consolidating facilities while developing new technologies, particularly a photolithography-based OLED deposition technology called eLEAP, but the INCJ has, after 13 years finally sold its last remaining shares in JDI, ending its participation in the company’s development.
The INCJ had invested ¥462 billion ($3.08 billion US) in Japan Display over the years and has announced that it has recovered ~66% of that investment (¥ 307.3 billion or $2.050 billion US) through stock sales in recent months, with a loss on the project of ¥154.7 billion ($1.03 billion US), for which the chairman of INCJ apologized in a public statement. This leaves Japan Display in the hands of Ichigo and its public shareholders, who have not been a happy lot over the last five years. We do give Ichigo chairman (and JDI CEO) Scott Callon credit for taking the many steps necessary to try to right a ship that was poorly managed for many years. Hopefully the company will reach its goal of a return to profitability next year.
In 2020 Ichigo (2337.JP), a REIT and asset manager, took over the reins at JDI and has been trying to reshape the company into a profitable entity. It has not been an easy task given the intense competition in the display space and the older LCD fabs that have been part of the company culture. Ichigo has been selling underused assets and consolidating facilities while developing new technologies, particularly a photolithography-based OLED deposition technology called eLEAP, but the INCJ has, after 13 years finally sold its last remaining shares in JDI, ending its participation in the company’s development.
The INCJ had invested ¥462 billion ($3.08 billion US) in Japan Display over the years and has announced that it has recovered ~66% of that investment (¥ 307.3 billion or $2.050 billion US) through stock sales in recent months, with a loss on the project of ¥154.7 billion ($1.03 billion US), for which the chairman of INCJ apologized in a public statement. This leaves Japan Display in the hands of Ichigo and its public shareholders, who have not been a happy lot over the last five years. We do give Ichigo chairman (and JDI CEO) Scott Callon credit for taking the many steps necessary to try to right a ship that was poorly managed for many years. Hopefully the company will reach its goal of a return to profitability next year.
Figure 1 - Japan Display Stock Price Chart - Source: Yahoo Finance
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