Japan Display Inc. announced plans to harvest ¥55 billion or about $517 million through share and assets sales. Sources say that the legacy LCD panel producer needs the money to make LCDs, not OLED displays.
It might come at a surprise to some, but with iPhone X sales underperforming supply chain expectations, it may be that OLED displays will still be out of consumers’ favor for a time. But as Apple is JDI’s largest client, how the iPhone maker moves forward may affect the fate of the other company.
Nikkei Asian Review reports that ¥30 billion of shares will be sold to 15 institutional investors abroad with the largest portion going to a Hong Kong group. The rest of the money will be gained from the sale of one of JDI’s plants in Ishikawa Prefecture to a national investment fund, the Innovation Network Corp. The plant, which was in transition to OLED manufacturing, would be passed along to JOLED — a spinoff comprised of Sony and Panasonic display businesses.
However, JDI is likely going to use this money to patch up its negative cash flow, which has persisted since March of 2016 thanks to ebbing LCD sales and investments in OLED.
If Apple decides to lean its bias on LCD iPhone shipments this year, it could go to Chinese alternatives like BOE and Tianma. If it wants to continue pushing OLED, JDI would be left in a difficult position with the build-out of its production lines.
The company’s share price fell on Friday by 1.5 percent.