Apple may throw a lifeline to struggling iPhone display maker

iPhone sales
Japan Display currently makes the iPhone XR displays for Apple.
Photo: Apple

Apple may help out struggling display maker Japan Display, a new report claims.

Japan Display, which makes screens for the iPhone XR and an upcoming Apple Watch model, suffered a devastating blow this week. After appearing to have sorted out a bailout from a Chinese consortium, several members dropped out.

As with many suppliers, Japan Display relies on its Apple business. Around half of its revenue comes from Apple, according to its financial reports. Now Apple may step in to throw the company a lifeline.

Apple previously supplied some of the funding for Japan Display to build a factory in Japan to make iPhone panels. Japan Display was due to pay Apple back in yearly increments of 20 billion yen ($184 million). As of March this year, Japan Display owes 100 billion yen. To throw Japan Display a potential lifeline, Apple may be willing to renegotiate how it is repaid.

According to the Wall Street Journal (paywall):

“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 yen] 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.”

One of the challenges Japan Display faces is its previous insistence on sticking with LCD technology. This was at a time when the rest of the industry was switching over to OLED. While Japan Display is now embracing OLED (its new screens for the 2019 Apple Watch will be OLED), it is considered far behind competitors. Because Apple is supposedly ditching LCD iPhones next year, some prospective investors are worried abut what this will mean for Japan Display’s future.

This article was originally posted here