Apple Component Supplier, Japan Display, Receives $636 Million in Bailout Cash

According to a report published Wednesday morning in The Wall Street Journal, one of Apple’s foremost iPhone component suppliers, Japan Display (JDI), hasn’t been doing too well in recent years — a reality, made all the more complicated when the company’s cash cow began dwindling in sales for the first time in almost a decade. To be fair, JDI was already facing somewhat of a cash crunch, merely as the result of increased pricing competition in the component supply business, in addition to the fact that the Japanese component manufacturer was essentially “reliant” on Apple for a long time.

Not to worry though, according to the same report JDI is gearing up to accept as much as $636 million in ‘bailout’ funds to help it get back on its feet, courtesy of the firms largest, majority shareholder — the Japanese government-backed Innovation Network Corp.

So, what does JDI plan to do with its life-saving cash infusion?

According to The Wall Street Journal, JDI revealed that it intends to invest heavily in the further development of its OLED display business. This would be a novel idea, we think, particularly in light of the increased interest among smartphone manufacturers in adopting OLED display technology to take the place of its rapidly aging LCD counterparts.

The investment will reportedly include JDI’s purchase of an increased stake in a firm known as Joled — which is a consumer electronics firm created as a byproduct of the recent merger between divisions at Sony and Panasonic. JDI’s largest shareholder, Japan’s Innovation Network Corp., currently owns a 75% stake in Joled; so JDI will essentially be purchasing an additional 36% stake in the firm, in an effort to grow its ownership from just 15%, to majority status at 51%.

JDI’s Chief Executive Officer, Mitsuru Homma, also indicated that his company will invest in other ways, as well — in part by reducing its dependence on manufacturing mobile device components and, in turn, focusing its energies on boosting sales in other key categories, such as by selling vehicles, laptops, and Virtual Reality (VR) products.

Of course, while Apple has already been pegged to rely 100% on Samsung to supply it with OLED panels for its hotly anticipated iPhone 8 next year, JDI more than likely sees the benefit in developing its OLED business — if not to gain a share of future iPhone display orders, then perhaps to provide the Cupertino-company with OLED panels to be used on other Apple products rumored to switch over to OLED within the coming years. Currently, the only OLED-equipped device on offer from the company is the Apple Watch, although the wearable is equipped only with a small, 1.6-inch display.

Previous reports also suggested that JDI would be taking up the lion’s share of Apple’s OLED display orders moving forward, however the Japanese firm’s production processes likely won’t be able to meet Apple’s demand until 2018, at the earliest.

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