The headquarters of Japan Display in Tokyo. The firm is reviewing various options to strengthen its business competitiveness, including new factories.
Dow Jones/Tokyo
Japan Display may build a factory in Japan to increase panel production for clients such as Apple Inc, a person familiar with the matter said yesterday.
Apple would cover much of the plant’s construction costs, and would get most of its panel output for its line of iPhone mobile devices, the person said. The factory would start operating in 2016.
“We are reviewing various considerations to strengthen our business competitiveness, including new factories, but we haven’t made any decision yet,” Japan Display said in a statement yesterday. Apple declined to
comment.
Japan Display was formed in 2012 through the merger of the LCD units of Sony Corp, Hitachi, and Toshiba Corp, with the help of the government-backed Innovation Network Corp of Japan.
With growth in the smartphone and wearable mobile device markets expected to continue, many Asian display makers are planning to expand production. The person familiar with the matter said Japan Display is getting many enquiries from clients on its expansion plans.
The possibility of a new factory was first reported by local media, sending Japan Display’s stock price up more than 8% in morning trade. Shares of rival Sharp Corp
slipped 2%.
Sharp had been expecting a record net profit for the current business year ending March. But in January, it revised its forecast down to a net loss. The Osaka-based firm said it faces severe competition in its panel business. People with knowledge of the matter say that is because Japan Display is aggressively pursuing orders from China’s Xiaomi, a major Sharp customer.
Apple already buys panels from both Japanese companies. But should Japan Display work together with Apple to build a new factory, that would likely mean fewer orders for Sharp, further weakening its already precarious finances.
For the April-December period last year, Japan Display reported a net loss of ¥8.6bn ($72mn), although it logged ¥19.2bn net profit for the October-December quarter. It expects to lose ¥12.1bn for the full year ending March.
