Japan Display Inc., which makes liquid-crystal display panels for the iPhone XR, is running out of cash owing to weaker-than-expected sales of the handset, and an investor group’s bailout package of more than $700 million was thrown into limbo this week… Taiwan-based touch panel maker TPK Holding Co was originally a key part of the bailout plan, according to a Japan Display announcement in April, but TPK said Monday that it was dropping out.
With financing from Apple, Japan Display spent ¥170 billion, or nearly $1.6 billion, to build a factory in Japan three years ago to make iPhone panels, according to a Japan Display spokesman. Japan Display agreed to pay back at least ¥20 billion a year, and the outstanding amount as of March was ¥100 billion, the spokesman said.
While Apple has agreed to loosen the repayment terms, prospective investors in Japan Display are asking for further concessions, including waiving some of the debt outright, injecting new cash of up to ¥20 billion and guaranteeing orders to Japan Display for this year and next year, said people involved in the talks.
Apple has signaled it could consider the requests, they said. “We are not sure yet if we would really need to tap Apple to chip in, and the amount could be lower than ¥20 billion, but they are at least showing willingness,” said one person involved in the talks. “You’d be surprised to see how supportive Apple is to us.”
MacDailyNews Take: Make that “perpetually-struggling” Japan Display. Obviously, Apple would like to have viable display makers around in order to have them compete for Apple’s business. Having multiple options keeps prices down and keeps suppliers quality up as they compete for Apple’s coveted business. Luckily for Japan Display, Apple is willing and able to throw multiple lifelines. Hopefully, someday, Japan Display will finally right their ship.
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