At the Last Moment, one of Japan Display's big Bailout Investors Pulled Out, Pressuring Apple to now Save the Day
Patently Apple posted a report earlier this month titled "Funding for Japan Display's OLED Plant has been approved to make Displays that will meet Apple's Demanding Quality." Yesterday the funding collapsed when Harvest Tech, that was set to commit $485 million in the bailout package, surprisingly pulled out.
With Japan Display making LCD displays for Apple's entry iPhone 11 and older Apple Watches, Apple's planned investment of US$200 million may not be enough to keep the display maker viable longer term. Apple accounts for 60% of Japan Display's annual revenue, according to the Financial Times.
Its survival now rests on financial support from Apple, a Japanese government-backed fund and Oasis.
At a news conference on Thursday night, Minoru Kikuoka, Japan Display’s new chief executive, said the company did not face any imminent funding shortage since it had recently secured ¥20bn in loans from its biggest shareholder, the Innovation Network Corporation of Japan.
The company will aim to raise $430m by as early as next month with support from Oasis, Apple and another supplier. It is also in talks with several private equity firms, according to Mr Kikuoka.
Sales were also down this year from Chinese OEMs Huawei, Oppo, Vivo and Xiaomi because Samsung offered these OEMs an alternative, competitively priced OLED screen.
The Financial Times oddly noted in their report that "Japan Display’s latest troubles also stemmed from disappointing sales of the iPhone XR, the only model in Apple’s last line-up that used Japan Display’s liquid crystal display as the US company shifted to the use of OLED."
Yet Apple's iPhone XR was Apple's best selling iPhone up until the new iPhones launched, making that part of the report questionable. For more on this, read the full Financial Times report.