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Apple, Japan Display said to discuss new iPhone screen plant

Apple, Japan Display said to discuss new iPhone screen plant

A new facility would add capacity for a struggling iPhone screen maker

Apple is in talks with iPhone screen maker Japan Display that could result in the construction of a new screen factory in Japan, Japanese media reported Friday.

Apple would take on most of the ¥200 billion (US$1.6 billion) investment for the factory in Ishikawa Prefecture in central Japan, according to reports in Nikkan Kogyo Shimbun and Jiji Press, which did not name any sources.

The plant in Hakusan City could begin operations in 2016, producing LCD panels for Apple and other manufacturers. But Apple is also in talks with other suppliers including Foxconn, and the situation is fluid, the reports said.

Japan Display only said it is pursuing opportunities to improve competitiveness including the construction of new factories, but no formal decision has been made. Apple Japan would not comment on the reports.

Under a government-backed reorganization, Japan Display was established in 2012 out of the small display units of Sony, Toshiba and Hitachi amid intense competition from overseas rivals.

It has focused on producing high-resolution, low-power LCDs. It already has two TFT LCD plants in Ishikawa, but its primary LCD factory is in Mobara, southeast of Tokyo. All three facilities are included on Apple's official supplier list.

Japan Display isn't the only iPhone screen manufacturer, and it has struggled with production delays for Apple parts. While demand from Apple and Chinese manufacturers has improved its recent performance, the company still expects a net loss of ¥12 billion for the year to March 31, down from a net profit of ¥34 billion a year earlier.

Tim Hornyak covers Japan and emerging technologies for The IDG News Service. Follow Tim on Twitter at @robotopia.

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