“Japan Display’s rescue is an embarrassing necessity for Tokyo. An investor group is buying two thirds of the company for up to 80 billion yen ($714 million), a lowball price for the former national champion,” Alec Macfarlane writes for Reuters. “It will fall into foreign hands, some of them Chinese, which could raise red flags. Yet managers have little choice but to pray the deal closes.”
“Japan Display was created with government funds in 2012. The idea was to fend off South Korean and Taiwanese rivals by merging Hitachi, Sony and Toshiba’s liquid-crystal display units. The deal created the world’s biggest maker of panels used in smartphones and tablet computers, but the company failed to stay competitive,” Macfarlane writes. “It has lost money every year since 2015.”
“Despite multiple state bailouts, Japan Display, and all its domestically developed technology, now looks set to be taken over by outsiders on the cheap… 0.4 times book value,” Macfarlane writes. “The announcement comes at a fraught time for U.S.-China relations, which might complicate the transaction. More than half of Japan Display’s 2018 sales came from Apple. A Chinese role in the takeover could therefore draw attention from the Committee on Foreign Investment in the United States; Japan Display has a subsidiary in San Jose, and the company’s fingerprint sensor technology could raise security concerns.”
Read more in the full article here.
MacDailyNews Take: Last chance.
SEE ALSO:
Apple supplier Japan Display agrees to $2.1 billion bailout – April 12, 2019
Apple supplier Japan Display wins $640 million from government-backed fund to boost OLED tech as Apple eyes new iPhone display – December 21, 2016
Apple’s next-gen flagship OLED iPhone is codenamed ‘Ferrari’ – December 20, 2016
Apple says OLED finally ready for iPhones, but most suppliers still aren’t – November 17, 2016
Apple supplier Japan Display seeks $703 million bailout from Japanese government – November 11, 2016
Sharp President confirms Apple iPhone transition to OLED displays – October 31, 2016
Apple supplier Sharp names Foxconn exec as CEO to spearhead revival – May 12, 2016
Apple supplier Sharp preps AMOLED displays after Foxconn acquisition – April 6, 2016
Did Apple help Foxconn buy Sharp? – March 31, 2016
Japan Display, an Apple iPhone supplier, seeks financial help from Japanese government – August 9, 2016
Japan Display CEO hints at strong Apple orders ahead of new iPhone launch – September 3, 2015
Japan Display and Apple to build new $1.4 billion plant for iPhone Retina displays – March 6, 2015
Japan Display’s reliance on iPhone orders rises – June 24, 2014
So they apparently have a good product (since Apple is buying from them) and a terrible business plan?
Display manufacture is very competitive and needs very good investment and savvy manangement to keep up with the technology. JD definitely lacks the latter.
I was hoping at some time Apple would buy JD and use its magic to make it competitive and innovative but probably their decision not to make further investments was a smart move.
More like a victim of a terrible business plan by Apple. But it was hyped up (what’s new) and they were talked into it. Single product mfrs are vulnerable when depending on a single supplier who also depends much on the single product.
A perfect storm of bad biz.
Or a big conspiracy by Foxconn/Apple consortium to acquire JD at 40% of the book value?
Perhaps the latter.
single supplier ➝ single client
I’ll be waiting with excited anticipation for China to take over the company’s finger print sensor tech in San Jose. /s
So, in the name of national security, are we looking at a possible US Bailout of Japan Display?