Apple doubling bailout funds for iPhone screen supplier Japan Display

AppleInsider

Japan Display, maker of iPhone screens, says it expects to receive new investment that will bail it out this month, and sources say the investor will be Apple chipping in more than it expected to.

Japan Display makes the LCD screens used in the iPhone 11

Following several years of financial issues, culminating most recently in a bailout investor cancelling their commitment, Japan Display claims it is on the verge of a new deal. The iPhone screen manufacturer had previously been expecting a bailout worth 80 billion yen, or approximately $750 million, but is now saying it will continue on a smaller sum.

"We are close to 50 billion [yen, approximately $470 million]," Japan Display's CEO Minoru Kikuoka told Reuters, "And I believe we can cement the deal this month."

Japan Display says that a major client intends to invest $200 million, and that this is double the amount this company previously planned. Sources say this major client is Apple.

Reportedly, a further $150 to $180 million will be invested by Hong Kong firm Oasis Management. The remaining $90 to $120 needed for the new bailout figure is believed to be coming from another Japan Display supplier and other, unspecified, sources.

Japan Display has been a longstanding supplier to Apple and currently produces the LCD-based screens used in the iPhone 11. It does not as yet produce the OLED displays that are used in the iPhone 11 Pro and iPhone 11 Pro Max, and the company does not yet plan to move to the newer technology.

"We are not planning to make capital investments on our own for OLED," said Kikuoka. Kikouka said such a move would require the conversion of an idle LCD plant at a cost of at least $1.9 billion.

However, he said that LCD orders had gone up more than expected. These "stronger than previously planned" orders are believed to come from Apple as it was recently reported to be increasing its orders for the iPhone 11.

lkrupp

Apple now makes its own SOC so why not make their own screens too? Maybe I’m naive about the engineering and costs involved but relying on a company that regularly mocks you and your customers to make your OLED screens doesn’t seem like a good business decision. And it would seem that building an OLED plant in the U.S. might be more feasible because it would be mostly automated. After all, South Korea is not China in terms of its democracy and economy. It’s more like the U.S.

AppleExposed

lkrupp said:

Apple now makes its own SOC so why not make their own screens too? Maybe I’m naive about the engineering and costs involved but relying on a company that regularly mocks you and your customers to make your OLED screens doesn’t seem like a good business decision. And it would seem that building an OLED plant in the U.S. might be more feasible because it would be mostly automated. After all, South Korea is not China in terms of its democracy and economy. It’s more like the U.S.

Apple doesn't want to be a manufacturer but anything to cut off Sammy's revenue is welcome.

avon b7

lkrupp said:

Apple now makes its own SOC so why not make their own screens too? Maybe I’m naive about the engineering and costs involved but relying on a company that regularly mocks you and your customers to make your OLED screens doesn’t seem like a good business decision. And it would seem that building an OLED plant in the U.S. might be more feasible because it would be mostly automated. After all, South Korea is not China in terms of its democracy and economy. It’s more like the U.S.

Apple and Samsung are frenemies but, technically speaking, the Samsung that makes the screens for Apple is not the same Samsung that mocks them.

Apple doesn't make its own SoCs, it designs them. They are manufactured by TSMC.

There probably aren't enough iPhone sales to enable the company to get into the screen research and development (manufacturing) business in a competitive way.

mjtomlin

lkrupp said:

Apple now makes its own SOC so why not make their own screens too? Maybe I’m naive about the engineering and costs involved but relying on a company that regularly mocks you and your customers to make your OLED screens doesn’t seem like a good business decision. And it would seem that building an OLED plant in the U.S. might be more feasible because it would be mostly automated. After all, South Korea is not China in terms of its democracy and economy. It’s more like the U.S.

Apple does not make their SoC's, they design them and then contract TSMC to make them.

And for the most part, Apple also doesn't use off-the-shelf displays in their mobile devices. They do have a huge display R&D department and a lot of what Japan Display, Samsung, and LG do are made to Apple's specs.

CloudTalkin

I will continue to ask why.  There seems to be no logic to this continued bailout.  I'm sure there's a ton we aren't privy to here, but from the outside... WTF.

sarthos

CloudTalkin said:

I will continue to ask why.  There seems to be no logic to this continued bailout.  I'm sure there's a ton we aren't privy to here, but from the outside... WTF.

Obviously, they need the screens these guys produce.  Samsung may have already converted most of it's factories to OLED by now and can't go back to LCD so who else is going to pick up the slack?  They are basically just pre-paying for future orders.  It's not a gift.