Japan Display considers deeper restructuring, seeks more funding

TOKYO - Japan Display Inc is considering a deeper restructuring than it first announced, including seeking outside financial help, as its late entry into OLED technology has caused the loss of business with Apple Inc, the Nikkei business daily reported on Wednesday.

Japan Display shares climbed 11 percent following the report of the latest possible restructuring in Japan's struggling technology industry. Toshiba Corp is in the process of selling off its prized chip unit to shore up billions of dollars to cover cost overruns at its bankrupt nuclear unit Westinghouse.

Japan Display is reaching out to investment funds and is looking at capital and business tie-ups, the newspaper said. The company will also appoint a new management team at its annual shareholders meeting later this month, and announce a new medium-term business plan by August, said Nikkei.

The company, which has posted three straight years of losses, earlier announced a 30 percent cut in its workforce late last year, and has also been consolidating production at its plants.

A company spokesman said that the Nikkei report was not based on any announcement by the company.

In addition to the outside investors, the company is also seeking further help from the Innovation Network Corp of Japan (INCJ), a government-led technology venture which already extended the panel maker a lifeline last year.

INCJ helped create Japan Display in 2012 by financing the merger of the display units of Hitachi Ltd, Sony Corp and Toshiba Corp as a way of rescuing the country's teetering tech industry.

In December, INCJ agreed to provide up to 75 billion yen ($685 million) to help the company.

Japan Display has largely been in the red since its creation because of fluctuating demand for iPhones made by Apple, its biggest customer for liquid crystal display screens, which account for about half of its sales.

It also has been late to start developing organic light-emitting diode (OLED) panels, a thinner, more flexible technology used in higher-resolution displays which more smartphone makers including Apple are starting to use.

The company is forecasting more near-term losses due to falling sales and higher costs at one of its new plants, while it also pours more investment into OLED development. It plans to start mass manufacturing OLEDs next year. -Reuters