Today, Japan Display Corporation (JDI), the only liquid crystal display company in Japan, has become the last glory and hope of the entire Japanese liquid crystal industry because of its first-class LCD technology. However, JDI has been in the red for eight years in a row after being quickly overtaken by later-comers and a late turnaround OLED. In recent years, JDI has been selling assets frequently in an effort to redeem itself.
On March 10, after selling its China unit just two months earlier, JDI announced the sale of its Higashura plant in Japan to SONY Semiconductor Manufacturing (SCK) for an undisclosed sum, but a book value of 5.4 billion yen (about 280 million yuan) in buildings and facilities.
It makes sense for SONY to take over
Today, JDI has four LCD panel plants in Japan, namely, Higashiura, Tottori, Ishikawa and Moigahara. Its operating glass substrate sizes are mainly G3.5 (600 mm ×720 mm) to G6 (1500 mm ×1850 mm) small and medium-sized LCDpanels.
The Dongpo plant, which is being sold by JDI, is known to be a G3.5 production line used to manufacture relatively small LCD panels. Demand for products made at the Dongpo plant has also declined due to the lower production capacity and cost competitiveness of the G3.5 line. As early as May 10, 2022, JDI announced its decision to end LCD panel production at its Dongpo plant by March 2023 in order to improve its competitiveness and profitability.
Industry insiders believe that it is reasonable for JDI to transfer the Dongpo plant to SONY. First of all, JDI was established by the Japanese government led by the integration of SONY, Toshiba, Hitachi and Panasonic four resources, itself with SONY blood; Second, the sale of the Higashiura plant, a former joint venture between SONY and Toyota, began operations in 1998. Third, JDI's Dongpo plant produces small LCD panels that are already suitable for products such as digital cameras and wearable devices, which is exactly what SONY wants.
After the Dongpo plant is sold, VR, automobile and newly developed display production operations at the original plant will be transferred to other JDI plants.
In addition, JDI has signed a lease agreement with SONY to continue to use some equipment at the Dongpo plant, and will set up a "Dongpo Engineering Center" in the same building from April this year. After the building is transferred, JDI plans to continue its business activities such as display technology design, prototyping and after-sales analysis.
Selling assets to survive
As the only liquid crystal display company in Japan, JDI was the last glory and hope of the entire Japanese liquid crystal industry with its first-class LCD technology. However, with the high maturity of LCD technology, the so-called technological advantage of JDI was quickly overtaken by its peers. In recent years, competition in the LCD market has been fierce and the profit of its products has been decreasing. On the other hand, most mobile phone brands including Apple have adopted OLED, which has led to a decline in JDI's performance. JDI has been in the red for eight consecutive years since fiscal 2014, which ended in March 2015. In the 2022 fiscal year, according to the results announcement of JDI, the net profit loss of the first three quarters of 22.4 billion yen (about 1.16 billion yuan), if there is no accident, JDI will lose for 9 years.
In recent years JDI appeared to have become unsustainable, selling off half its factories and offshore assets to survive.
According to historical data, JDI had six LCD panel plants in Japan, including the existing Tottori, Ishikawa and Moigahara plants, as well as the recently sold Tonpo plant, as well as the former Noemi and Shiraksan plants.
In December 2017, JDI stopped production of its Noemi plant for the first time, and transferred it to JOLED, an OLED panel manufacturing technology manufacturer, to transform it into a printed OLED manufacturing process, starting to produce OLED panels at the end of 2019.
In August 2020, JDI announced the sale of the White Mountain plant. Of the total, land and buildings were sold to Sharp for 41.2 billion yen (about 2 billion yuan), and factory equipment was sold to Apple for 30.1 billion yen (about 1.54 billion yuan). The Baeksan plant, once JDI's main production base, has been producing LCD screens for iphones since it started operation in late 2016.
At that time, industry analysts said that JDI would likely continue to retire or sell its facilities to rebuild its business. Less than a year later, on July 8, 2021, JDI announced the sale of its Taiwan manufacturing subsidiary to Wistron, an electronics manufacturing service company, for about 8 billion yen (about 470 million yuan). Wistron, the buyer of JDI's manufacturing unit, which is mainly responsible for the afterprocess of LCD panels used in automotive and industrial equipment, had been doing contract manufacturing services for JDI.
At the end of 2022, JDI also announced the sale of 100% of its Chinese subsidiary Crystal End Display Precision Electronics (Suzhou) Co., LTD. (" Crystal End Display ") to Suzhou Dongshan Precision Manufacturing Co., LTD. (" Dongshan Precision ") for 20.5 billion yen (about RMB 1 billion yuan). It is understood that Jingduan Display is responsible for part of the manufacturing process of JDI automotive panel, and Dongshan Precision for the industry's well-known touch display module and LED display device manufacturers, mainly involved in the manufacture of small and medium-sized touch display products, including automotive industrial control products. On January 19 this year, Dongshan Precision notice has completed the delivery. In the past two months, JDI has sold the Dongpo plant again.
Where does the future go?
As JDI continues to liquidate its display capacity in Japan and abroad, the industry is also focusing on its future.
According to Dong Min, deputy secretary-general of China Electronic Video Association, in the field of LCD screens for mobile phones, JDI has outstanding technical strength, especially in LTPS LCD (low temperature polysilicon liquid crystal liquid crystal) display technology, JDI has a good accumulation of technology. In addition, JDI has a clear advantage in professional displays such as in-car displays. In addition, JDI also has a certain accumulation in the field of OLED panel. JOLED invested by JDI has mastered the world's leading OLED material printing film, oxide semiconductor, as well as flexible panel and other related technologies, and its inkjet printing OLED will become a strong competitor of steamed OLED.
Some industry insiders point out that if the development goes smoothly, the ideal direction of JDI may be like this: on the one hand, JDI rapidly increases the capacity of high resolution small and medium-sized LCD panels, and tries to firmly grasp the orders of Apple again, while achieving rapid development in the market of vehicle display, VR equipment and smart wear; On the other hand, give full play to the advantages of JDI and JOLED, timely improve the printing process of small and medium-sized OLED panel, while greatly reducing the cost of OLED panel, to achieve a strong counterattack in the smartphone panel market.
However, some in the industry believe that the reality is very likely to move JDI in the other direction entirely: On the one hand, after JDI cut down most of its production capacity, due to the limited production capacity, the small and medium-sized LCD panels with ultra-high PPI index developed by JDI could not support the general market demand. Finally, it could only maintain the customized cooperation with minority brands in the high-end application field, resulting in the lack of profitability, and gradually in the technological upgrading of Chinese and Korean manufacturers, The loss of competitive advantage and eventual decline; On the other hand, the printed OLED panel technology jointly supported by JDI and JOLED may also struggle to form an effective scale due to the conservative and hesitant financial supply of the major shareholder INCJ. The only hope is that Chinese and Korean manufacturers will benefit from the steaming OLED panel market.
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Gestant Display Technology Co.,LTD was founded in 2012 in Shenzhen China. Even, the founder of the company, has more than 15 years of rich experience in LCD display industry. He has been engaging in the basic research of LCD display technology in Japan since his graduate school and has been working in the flat panel display industry after graduation.
Proficient in the manufacturing process and technology development of LCD / OLED / polarizer, Even was also one of the members of China liquid crystal Association who has a senior industry background and supply chain resources. In the past three years, he assisted his shareholders in building factories, purchasing equipment，establishing production lines, and successfully obtaining ISO9001 and ISO14001 system certificates.
He has established good business relations with major panel manufacturers in China (BOE /Tianma / IVO /EDO / Visionox), and the glass supply is stable and sufficient.
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