Apple helping out LCD supplier Japan Display with shorter payment terms

AppleInsider

Alongside previously reported bailout aid, Apple is now said to be helping financially troubled Japan Display by shortening the amount of time it takes to pay the screen manufacturer.

Apple's new iPhone 11 has LCD screens, at least some of which are made by Japan Display.

Apple is continuing to support the iPhone screen manufacturer Japan Display by shortening its payment periods, the time between delivery of screens and Apple paying for them. It's part of a short term plan to stabilize the screen firm's finances, and comes alongside Apple's previous moves to help the company.

According to Reuters, Japan Display's new CEO Minoru Kikuoka told reporters that an immediate cashflow shortfall had been allayed. He did not give any details, including naming any investors, but sources report that the aid has come from Apple.

Kikuoka did say that other business partners have eased their payment conditions, and that in total this would mean Japan Display's short-term financing situation would be improved by as much as $370 million.

Separately, Apple has been considering a further bailout of the company following the recent failure of a consortium which had been about to invest in it.

According to Kikuoka, the revised bailout deal will be sufficient to keep the company in business, though he notes that it may not be finalized this month as planned.

Reuters reports that Japan Display depends on Apple for 60% of its revenue, and that it has had five years of losses. Japan Display previously made LCD screens for iPhones but was slow to move to the OLED ones Apple is increasingly using for devices such as the iPhone 11 Pro and iPhone 11 Pro Max.

CloudTalkin

Explanations for Apple's continued rescue of JDI:

• Apple's wife is tied up in the basement at JDI HQ
• Apple's husband is tied up in the basement at JDI HQ
• Apple's husband AND wife are tied up in the basement at JDI HQ (hey, I don't judge)

It's literally the only thing that makes sense at this point.  

lkrupp

AppleInsider said:

 Japan Display previously made LCD screens for iPhones but was slow to move to the OLED ones Apple is increasingly using for devices such as the iPhone 11 Pro and iPhone 11 Pro Max.

Well there you have it. More than one company has been caught with its pants down when technology moved on.

gatorguy

CloudTalkin said:

Explanations for Apple's continued rescue of JDI:

• Apple's wife is tied up in the basement at JDI HQ
• Apple's husband is tied up in the basement at JDI HQ
• Apple's husband AND wife are tied up in the basement at JDI HQ (hey, I don't judge)

It's literally the only thing that makes sense at this point.  

The assumption I would make is that Japan Display has already been contracted for a display engineered for an upcoming Apple product which can't(won't) be delayed.

yuck9

GT Advanced Technologies repeat ?

CloudTalkin

lkrupp said:

AppleInsider said:

 Japan Display previously made LCD screens for iPhones but was slow to move to the OLED ones Apple is increasingly using for devices such as the iPhone 11 Pro and iPhone 11 Pro Max.

Well there you have it. More than one company has been caught with its pants down when technology moved on.

Their pants were down because they were servicing Apple (pun intended).  Apple loaned JDI $1.5B for an LCD plant when almost everyone else was moving to OLED... including Apple.  They built a plant for a product that was no longer top priority for their #1 customer.  The only way to pay Apple back was for that plant to be producing copious amounts of LCD panels. We know that didn't, and probably never will happen.  JDI's success seemed to hinge on Apple doing what they had always done: use LCD panels for their phones.  That billion dollar investment probably made JDI's management think Apple was going to forego OLED, stick with LCD for the foreseeable future, and switch to microl LED further down the road.  Although that scenario is entirely my conjecture, I don't think it's unrealistic that JDI's thinking was similar to that.

CloudTalkin

yuck9 said:

GT Advanced Technologies repeat ?

This one is nothing like GTAT.  GTAT was about one company making promises (scalable sapphire screen cover glass) that they couldn't deliver.  

kevin kee

From another article:
"To build a full OLED production plant in China will take three to four years before the product comes off the line," Lee advised. "To build in Hakusan, it may take only 2 to 2 [and a half]. The cost at Hakusan would be half or less. The market changes rapidly, the Chinese OLED manufacturers will eventually catch up."

Lee added "We don't have three or four years to wait for JDI's OLED to reach the market. Our major customer cannot wait that long." It is likely that Lee is referring to Apple as the "major customer," as the iPhone maker accounts for some 60% of JDI's revenue in the 2018 fiscal year. 

By converting the LCD facility to OLED, it will allow the company to start supplying OLED panels to the market relatively quickly.

CloudTalkin

kevin kee said:

From another article:
"To build a full OLED production plant in China will take three to four years before the product comes off the line," Lee advised. "To build in Hakusan, it may take only 2 to 2 [and a half]. The cost at Hakusan would be half or less. The market changes rapidly, the Chinese OLED manufacturers will eventually catch up."

Lee added "We don't have three or four years to wait for JDI's OLED to reach the market. Our major customer cannot wait that long." It is likely that Lee is referring to Apple as the "major customer," as the iPhone maker accounts for some 60% of JDI's revenue in the 2018 fiscal year. 

By converting the LCD facility to OLED, it will allow the company to start supplying OLED panels to the market relatively quickly.

Yeah, but depending on when the conversion would be completed, we'd be talking about anything from iPhone 13 at the earliest (most likely not imo) all the way out to iPhone 15. Don't forget Apple also has other irons in the fire.  OLED panels possibly from the likes of LG and.BOE.  They've acquired microLED firms as well.  I mean recent history should be an object lesson for JDI.  They were building LCD plants when the world had moved on to OLED.  Now they want to take another 2-2.5 years to ramp up to OLED.  There's no telling where the market will be and they'd be attempting to get to where the market is now.  Wish them well, but that outlook seems pretty bleak.  Especially bleak when you look at all the machinations companies are going through just to keep them afloat. 

kevin kee

Risky investment unless there is more behind the story, such as JDI secretly build MicroLED factory in large scale while throwing the story about OLED to confuse competitors. 

CloudTalkin

kevin kee said:

Risky investment unless there is more behind the story, such as JDI secretly build MicroLED factory in large scale while throwing the story about OLED to confuse competitors. 

I don't understand.  How would that -even if true- confuse their competitors?  Everybody knows everybody else is working on microLED and it's common industry knowledge Apple is working on microLED. Heck months ago I suggested JDI forego OLED and try to get microLED efforts off the ground.  If I can come up with that idea, as pedestrian as I am, sitting in an office chair... ain't nobody gonna be confused.  Besides, it's highly unlikely.  JDI is subsistence living right now.  They don't have the required funding for that type of R&D and continued operations.  I mean, we're commenting on an article about how investors are trying to keep the company alive.