Japan Display Corp. said on Friday that it would receive a $100 million investment from a customer, said the source is Apple, as part of a bailout agreement led by a Chinese investment company for smartphone screen makers.
Japanese monitors are facing financial constraints as Apple’s recent shift to liquid crystal displays (LCDs) and iPhone XR (the only LCD monitor model in Apple’s 2018 lineup) is disappointing.
According to people familiar with the matter, as of the last fiscal year of March, Apple accounted for 60.6% of Japan’s display revenue and will join a consortium led by China’s Harvest Group with an investment of 80 billion yen ($743 million).
Apple declined to comment.
Japan showed that the company had officially decided to inject nearly $500 million in a statement, including a $100 million investment from unidentified customers.
In another statement later Friday, the Japanese company said that another consortium member, Hong Kong-based investor Oasis Management, decided to invest between $150 million and $180 million. Investment depends on conditions, including major customer orders that have not been significantly reduced.
Harvest, Apple and Oasis’ total investment will remain below Japan Display’s $743 million targets. The company said it is negotiating with other potential investors to join the deal.
Asahi reported on Apple’s planned investment for the first time on Thursday, making Japan show that its share price has risen by 32%. The stock was flat on Friday.
Japan has shown that it has been seeking a bailout agreement with the Taiwanese consortium, but the pursuers have repeatedly postponed formal decisions to re-evaluate the company’s prospects.
Taiwanese screen maker TPK Holding Co Ltd and financial company CGL Group withdrew from the process earlier this month.
Four years ago, the Japanese display company owed more than $900 million to Apple for the $1.5 billion costs of building a smartphone screen factory.
In order to help stabilize the financial situation of Japanese monitors, Apple agreed to slow down the repayment rate for two years and consider increasing orders for Japanese monitors.
The US technology giant will also buy some organic light-emitting diode (OLED) screens for Apple Watch from Japan Display Company later this year.
Founded in 2012, Japan Display merges the liquid crystal display business of Hitachi, Toshiba and Sony into a government agreement.