JDI Ponders How to Enter OLED Business

Nikkei reports that JDI (described as ‘limping’) JDI has asked Mizhuo Bank for loans totalling around ¥100 billion ($900 milliion) to help the company to deal with the challenges of the move from premium brands buying LCD to AMOLED for smartphones. Nikkei said that in fiscal 2016, JDI earned 53.8% of its business from Apple, but as that company is expected to change to OLED, this business is expected to decline. As a result, the company has downgraded its forecasts as it us unable to supply OLED. Although the company has a development line for OLED and a share in JOLED, a full production line for OLED would be beyond the finances of the firm.

JOLED is also developing inkjet technology for OLED, but this is better for mid-sized or large-sized applications, rather than smartphones (smartphone ppi has to be much higher – Man. Ed.). JDI recently deferred the full takeover of JOLED because of financial concerns. (JDI to Defer JOLED Acquisition).

Nikkei said that as well as looking for more finance, JDI is considering options including stopping production at a couple of plants and cutting the payroll. It is also looking at debt guarantees from the INCJ, a Japanese government-backed development fund.

JDI higashiuraJDI’s Higashiura plant

Analyst Comment

When I was doing a lot of OEM business it was often said that big clients are great when you have them, but horrible when they go away. JDI has some great technology, as we see every year at SID, but clearly, not backing OLED more heavily earlier now looks like a bad move. (BR)