TOKYO (Reuters) - Japan Display Inc is considering restructuring beyond cutting jobs and consolidating production, a person familiar with the matter said on Wednesday, as its late entry into OLED technology caused loss of business with Apple Inc.
Earlier in the day, Japan’s Nikkei business daily reported the firm was looking at capital and business tie-ups, and seeking aid from investment funds including government-led technology venture Innovation Network Corp of Japan (INCJ).
Deeper restructuring would come just six months after INCJ agreed to invest up to 75 billion yen ($685 million) in the liquid crystal display (LCD) maker, and five years after INCJ helped form Japan Display from the ailing display units of Sony Corp, Hitachi Ltd and Toshiba Corp.
INCJ’s role in rescuing Japan’s struggling tech industry could intensify as it considers buying a stake in the chip business that Toshiba has put up for sale to help cover billions of dollars of cost overruns at its nuclear unit.
In a statement on Wednesday, Japan Display said it would delay increasing investment in organic light-emitting diode (OLED) panel maker JOLED Inc pending a new mid-term business plan, which would include Japan Display’s strategy for commercialising the technology for smartphones.
An agreement on raising its investment from the current 15 percent would be made by June 2018, the company said, a year later than previous plans for later this month.
Japan Display will announce a new medium-term business plan by August, after appointing a new management team at its annual shareholders meeting later this month, the Nikkei reported.
Shares in Japan Display ended nearly 10 percent higher following the Nikkei report, which a Japan Display spokesman said was not based on any announcement by the company.
The Reuters source was not authorised to speak with media on the matter and so declined to be identified.
Late last year, Japan Display said it would cut 30 percent of its workforce, and it has also been consolidating production.
The company has posted three consecutive years of loss in part because of fluctuating demand for Apple’s iPhones, the LCDs of which account for about half of Japan Display’s sales.
It forecasts more near-term losses due to falling sales and higher costs at a new factory, while it pours money into OLED.
Japan Display was late to start developing OLED panels, which are thinner and more flexible than LCDs and offer higher resolution. It plans to start mass producing them next year.
($1 = 109.4900 yen)
Reporting by Makiko Yamazaki and Naomi Tajitsu; Editing by Christian Schmollinger and Christopher Cushing