Japan display makers pay dearly for failing to foresee iPhone’s LCD exit

Apple's LCD suppliers bleeding after iPhone 12 LCD exit, iPhone 13 all-OLED

In an interesting turn of events, Japan-based display makers that once provided Apple with LCD panels are now facing financial hardship mainly due to Apple switching to OLED panels throughout its iPhone 12 and iPhone 13 lineup. As it turns out, Apple's decision to finally switch to OLED was not on the radar of these Japanese display companies. It is being reported that these Japanese display makers failed to anticipate that Apple would completely move to OLED panels thus resulting in them lagging behind in transitioning to OLED panel production in a timely manner.

Leading Japanese display supplier Japan Display Inc (JDI) is one of the biggest examples of this. JDI is now preparing for a potential delisting from the Tokyo Stock Exchange after it was denied additional financial assistance from INCJ, a state-backed fund.

According to sources, JDI currently owes approximately 90 billion yen (US$810 million) to creditors, with a deadline of March 2023 to repay 47.5 billion yen (US$430 million). It is important to note that, JDI already received a bailout of 80 billion yen (US$722 million) from INCJ back in 2019.

Sharp, another Japanese display maker that is now a part of Foxconn, also seems to be facing supply chain issues as well as increased competition in the LCD panel market. Due to these issues, Sharp recently announced a reduction in its planned capital expenditure for the fiscal year ending March 2022 from 200 billion yen to 130 billion yen.

Apple gradually reducing LCD orders

Apple has steadily been reducing its orders for LCD panels over the past few years. Back in 2017, Apple sourced approximately 50% of its display panels from JDI. However, by 2020, that number had dropped down to just 20% due to Apple moving its production to OLED panels.

With Apple now completely switching to OLED panels for its iPhone lineup, Japanese display makers are now facing an uncertain future. It is likely that due to these changes, the major Japanese display makers will have to shift their production away from smartphones and focus on other applications such as industrial, automotive, and medical devices.