A new month, a new chapter in the continuing bailout tale of Japan Display.
It was reported last month that after the lead company dropped out of the consortium, the rescue plan was again in doubt Nonetheless, a new report today indicates that, thanks to Apple, things may be back on track.
The story starts in 2016. Japan Display found its LCD orders dropping dramatically as manufacturers of smartphones began switching to OLED. The company did not have the capital needed to build OLED production lines that are expensive to create, so it needed a government bailout of $636 million to keep the company afloat and finally allow it to invest in OLED.
Apple took a leisurely path with OLED displays, beginning with the 2015 Apple Watch, followed by the next year’s Touch Bar on the MacBook Pro, and then its first OLED smartphone, the 2017 iPhone X.
The iPhone maker was keen to diversify their OLED supply chain away from Samsung as their sole supplier, but the market was increasingly competitive, with Sharp, LG, and BOE all hoping to win Apple’s business. Meanwhile, Japan Display was still struggling to raise the capital required for OLED display production on a large scale.
A second bailout was declared, initially for $723 million, but subsequently bandied about with a wide variety of numbers. Things looked great for a while as the plan was “confirmed,” and Apple Watch screens received orders from the company. Apple decided to assist the company by waiting for a $1.5 billion loan to fund LCD production offered to the company years earlier.
But, when a big backer left the rescue plan, things started to unravel. Apple decided to chip $100 million to help balance the books, but it still looked like OLED iPhone displays were at least two years away.
Then last month a second backer withdrew — this time the one leading the consortium.
Apple is set to rescue Japan Display
Today’s Reuters report suggests that Apple will double its expected rescue contribution
That would make Apple the fund’s largest single donor.
Japan Display is Apple’s primary supplier as it makes many of the iPhone 11 base model LCD screens. Longer-term, Apple wants to get the Japanese company on board as an OLED iPhone screen maker, increasing its reliance on Samsung — though that may be a while away. Meanwhile, for the Apple Watch, Japan Display has already received orders for OLED displays.