According to Reuters, Japan's display panel supplier Japan Display Inc (JDI) today announced that it will receive 117 billion yen (about $1.1 billion) from Chinese investors and company shareholders. This time, Chinese investors who will invest in JDI include the Chinese mainland investment fund Harvest Fund and Taiwan's touch panel maker TPK Holding, who will invest in JDI by buying stocks and bonds. 80 billion yen (about 4.8 billion yuan).
In addition, the remaining portion of the investment will come from JDI's major shareholder. Upon completion of the transaction, the Chinese investor will own a 49.8% stake in JDI, replacing the capital-funded INCJ fund and becoming the largest shareholder of JDI.
In fact, there were reports in January that the disappointing performance of Apple's iPhone XR is affecting the global supply chain, leading JDI to seek assistance from Chinese investors. Informed sources said at the time that JDI was in-depth negotiations with Qihong Technology and China Silk Road Fund on 30% equity investment.
As a long-term supplier of iPhone screens, JDI reached an agreement with Apple in 2015 to build a new factory in Japan to produce LCD panels for Apple's products. This is a very expensive project that cost JDI about $1.5 billion in funding.
As one of the world's largest LCD panel suppliers, JDI's prospects look bright, as the plant will strengthen its position as Apple's main screen supplier. According to people familiar with the matter, as part of the cooperation agreement, Apple will bear most of the $1.5 billion in costs, and JDI will reimburse the fee with a certain percentage of screen sales.
But four years later, Apple’s changing fate has put JDI in a difficult position and is likely to end its long-term position as a leader in display technology. The slowdown in iPhone sales, coupled with the proliferation of new iPhone models, many of which use newer OLED screens, make JDI's new factory (which only produces LCD screens) only run at half load.
Last month, Reuters quoted two people familiar with the matter as saying that JDI, which is in urgent need of funds, is seeking financial assistance from an investor group led by China Silk Road Fund. The person familiar with the matter said the Chinese investment group plans to invest $500 million to $700 million in JID, which is close to a majority stake.
The two people also said that the investment group plans to use JDI technology to build an OLED panel factory in China.