Japan Display inks $738M bailout deal, including reported $100M from Apple

Ailing LCD manufacturer Japan Display on Friday said a consortium led by China's Harvest Group has successfully raised the requisite funds to execute an 80 billion yen (about $738 million) bailout plan, $100 million of which is thought to come from Apple.

After months of negotiations, Harvest agreed to increase its investment in JDI to meet the 80 billion yet target, reports Reuters.

Harvest was reportedly willing to invest nearly $500 million to keep JDI afloat. In June, JDI confirmed the amount, adding that a single customer had agreed to a $100 million infusion as part of Harvest's offering.

Previous reports identified Apple as the mystery JDI investor. Apple is JDI's most important customer, with the tech giant's iPhone LCD panel orders accounting for some 60% of JDI's revenue for the 2018 fiscal year.

Apple was originally expected to make its investment through TPK Holding, a Taiwan-based display maker in talks to kick $230 million into the bailout pool. TPK stepped away from the deal in June.

Alongside Harvest, Hong Kong-based Oasis Management will invest between $150 million to $180 million. According to today's report, Oasis has offered to furnish additional funds to offset potential currency fluctuations. JDI plans to formalize the bailout at a shareholders meeting in August, the report said.

JDI is a joint venture that combined the display arms of Hitachi, Sony and Toshiba in a bid to better compete with Korean powerhouses Samsung and LG Display. While the company enjoyed some early success, it erred by investing heavily in LCD production and largely ignoring a wider industry trend toward OLED panels.

Apple became intertwined with JDI after fronting a large sum to help the display maker build a $1.5 billion panel factory in 2015. JDI now finds itself in arrears and with a funding shortfall as the iPhone maker and others reduce LCD orders on a path toward OLED.

In addition to the supposed $100 million investment, Apple has agreed to slow JDI's debt repayment timeline and potentially increase orders to stabilize the firm's finances. Reports also suggest Apple this year awarded JDI a portion of future Apple Watch OLED panel orders as the company works to shift production away from LCD technology.

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6 Comments

SpamSandwich 32917 comments · 19 Years

About 5 years ago

Bailouts are generally a really bad idea. They should’ve taken control of the company for that kind of cash infusion.

seanismorris 1624 comments · 8 Years

SpamSandwich said:

Bailouts are generally a really bad idea. They should’ve taken control of the company for that kind of cash infusion.

That’s not Apple’s business model. They don’t “make” anything, they design it, and outsource everything else. Why tie up cash in low margin businesses...

Instead Apple will “invest” in a company to keep a diversified supply chain, which creates competition and lower prices. Apple’s greatest fear (most likely) is to be completely reliant on Samsung...

iMaK 9 comments · 5 Years

This is why shit is so expensive. Big companies get bailed out and regular people pay the price.

1STnTENDERBITS 460 comments · 8 Years

seanismorris said:

SpamSandwich said:

Bailouts are generally a really bad idea. They should’ve taken control of the company for that kind of cash infusion.

That’s not Apple’s business model. They don’t “make” anything, they design it, and outsource everything else. Why tie up cash in low margin businesses...

Instead Apple will “invest” in a company to keep a diversified supply chain, which creates competition and lower prices. Apple’s greatest fear (most likely) is to be completely reliant on Samsung...

I agree with your premise. I just don't understand why JDI keeps being the beneficiary of Apple's (and other's) salvation. They haven't paid any dividends -real or metaphorical- to any company that has invested in their continued operation. First Apple and the Japanese government propped them up to keep the supply chain diversified with LCD panels... we know how that worked out. Now we have Apple and the Chinese government propping them up (hopefully to supply a bit of OLED, but primarily to concentrate on mLED). JDI doesn't fit the definition of competition to lower prices, and barely fits the definition of diversifying the supply chain. Admittedly, there's a lot I am not privy to, but keeping this company alive seems like giving a heart transplant to a patient that's going to die from liver cancer in a couple of weeks.

racerhomie3 1264 comments · 7 Years

This is good news. After using the iPhone X & XR I can agree that LCD is best for price & longevity. The differences are negligible in quality & can mostly be seen in hdr content(which is rare as 4K).