Japan Display boosting capacity

COMPETITIVE EDGE::The Japanese display maker of high-definition LCDs is confident that its rivals would find it hard to catch up, given the company’s unique technology


Sat, May 18, 2013 - Page 14

Japan Display Inc, which supplies LCDs to Apple Inc, is expanding a factory that makes panels for smartphones and tablet computers as the yen’s weakness helps spur overseas demand.

The company is boosting capacity of high-definition LCDs at its plant in Chiba Prefecture, east of Tokyo, president Shuichi Otsuka said in an interview on Thursday.

Japan Display plans to start the operations next month as it targets sales of as much as ¥800 billion (US$7.8 billion) this year, he said.

Tokyo-based Japan Display was set up last year, when Sony Corp, Toshiba Corp and Hitachi Ltd spun off their businesses to a government-backed fund after struggling to compete with South Korea’s Samsung Electronics Co and Taiwan’s Innolux Corp (群創光電) in the TV display market.

“Our business is now on track,” said Otsuka, a former chief operating officer at Elpida Memory Inc. “Our technology is unique, so it won’t be easy for other companies to do the same.”

The yen touched ¥102.76 per US dollar this week, the weakest since October 2008. It has tumbled about 21 percent since November, making it the biggest loser among 10 developed-nation currencies tracked by Bloomberg Correlation Weighted Indexes.

“It’s positive for our business,” Otsuka said.

Every ¥1 drop in the US dollar boosts Japan Display’s profit by ¥1.5 billion, he said.

Apple CEO Tim Cook told analysts last month that new products are in the works for later this year and through next year, without giving details.

IPhone 5S production may start as early as late next month, Jefferies Group LLC analyst Peter Misek said in a note this week.

Japan Display is ahead of its target with the expansion. Sales may reach between ¥700 billion and ¥800 billion in the year started April 1, from about ¥450 billion last fiscal year, Otsuka said.

The company plans to remain profitable, after posting an operating margin of no more than about 1 percent last year, he said without elaborating.

Japan Display wants to expand sales of displays used in cars such as instrument panels, Otsuka said.

Japan Display’s share of revenue in the global market for small and mid-sized LCDs was 16.6 percent last year, according to NPD DisplaySearch.

Sharp Corp held 14.8 percent, followed by LG Display Co’s 13.5 percent and Innolux’s 10.2 percent, the market researcher said.