Japan Display Inc (JDI), the struggling supplier of mobile screens to Apple Inc, said it has about a year before it needs to decide on whether to take a plunge on next-generation organic light-emitting diode (OLED) displays.
While OLED panels are slimmer, more energy-efficient and offer higher contrast, JDI’s liquid crystal displays retain a price advantage that would keep them competitive in smartphones through 2021, the company’s new chief executive officer Minoru Kikuoka said in an interview.
He anticipates a more decisive shift to the new technology could occur in that time period, declining to elaborate on specific customers’ plans.
Photo: Bloomberg
With the smartphone market plateauing and fancier screens failing to ratchet up demand from users already content with their existing devices, value for money has once again risen in importance for people considering a new purchase, Kikuoka said.
“We are seeing consumers put more emphasis on affordability when it comes to their smartphone preferences,” he said. “The industry is now gaining a new appreciation for the kind of price competitiveness offered by the LCDs.”
After repeatedly pushing back mass production of its own OLED screens, JDI is finally close to having its first OLED product, Kikuoka said, declining to give further details other than to say that it would not be a smartphone screen.
A person familiar with the matter confirmed an earlier report that JDI’s first OLED would be used in the Apple Watch.
Still, competing in the mobile phone arena would take billions of US dollars in additional investment, money that JDI does not have.
“There was a time when we felt the need to rush a shift to OLED,” Kikuoka said. “Without a partner who could pitch in on the capital side, we simply can’t do it.”
The company said last month that it lost another potential investor as China’s Harvest Tech Investment Management Co (嘉實科技) withdrew from its rescue plan.
That was the latest blow since June, when Cosgrove Global Ltd, Topnotch Corporate Ltd and TPK Holding Co (宸鴻) left a consortium that in April agreed to an infusion of 117 billion yen (US$1.1 billion).
Chinese screen makers BOE Technology Group Co (京東方科技) and Tianma Microelectronics Co (天馬微電子) had also shown interest in JDI’s OLED technology, but both have since focused on developing their own versions.
Having an actual track record of mass-producing OLED panels might bring those companies back to the table in the future, Kikuoka said.
A joint venture at JDI’s Hakusan plant in central Japan would be the easiest route, but exporting its manufacturing know-how to China is also an option, he said.
The company could also be open to offers from private equity and other sources of financing.
Kikuoka, 57, spent the first part of his career in finance with stints in Industrial Bank of Japan Ltd and Merrill Lynch.
After more than a decade at electronics parts and materials suppliers Nitto Denko Corp and Nidec Corp, he joined JDI’s finance division in 2017.
He was named chief financial officer in May before being promoted to the top post last month.
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