Japan Display CEO Minoru Kikuoka says that Apple will further aid the company by shortening payment periods as the panel supplier seeks to stabilize its finances.
CEO Minoru Kikuoka, who took the helm in September, told reporters on Wednesday that concerns about an immediate cash shortfall had been allayed but did not mention Apple by name. The support, which also includes agreements from other business partners to ease payment conditions, would improve its short-term financing situation by as much as 40 billion yen ($370 million), he added…
Japan Display, which depends on Apple for around 60% of its revenue, has lost money for the last five years and its liabilities now exceed its assets…
Of the planned bailout funds worth at least $470 million, Apple intends to invest $200 million, double the amount it originally planned, sources with direct knowledge of the talks have said… Japan Display still owes Apple nearly $900 million for the $1.5 billion cost of building a smartphone screen plant four years ago and the U.S. tech giant is also allowing the supplier to slow the pace of those repayments.
MacDailyNews Take: Apple must believe Japan Display can turn the corner, hence the continued and heightened aid. Apple benefits from having multiple quality display makers to choose from – and pit against each other – as competition drives down component prices. Right now, as has been the case for years, there is far too much reliance on Samsung Display for Apple’s comfort.
This might enlighten some incessantly complaining people (and MDN) about the difficulties that Apple faces in diversifying its iPhone component supply chain.
A decade or so ago, the situation was different. iPhone unit sales were much lower. Now Apple needs reliable sources of tens of millions of components for a JIT manufacturing process while also planning for component upgrades for the annual release of new iPhone designs. You cannot easily source high tech components in that kind of volume unless you are assembling products in China.
I have no doubt that Apple will continue to work to reduce its dependence on any single country, especially China, for its core revenue products. But I do not expect to see a large and rapid shift away from China. Reality beats wishful thinking every time.
Japan Display is dead man walking, put the chair Apple……
Sorry pull the chair Apple……