Lcd display factory.Apple invested 200 million dollars in the LCD panel. Japan display, a supplier to Apple, aims to finalise an important capital deal of at least 50 billion yen ($468 million) by the end of this month, after Apple had to act hastily after a Chinese investment group withdrew.
Kioroka Minoru, Japan Display’s new chief executive, said in an interview with Reuters that LCD displays were reviving interest because of strong demand for smartphones with reasonable prices and low screen costs.
“our transaction volume is close to 50 billion, and I believe we can close the deal this month.” Kikuoka, who ran the cash-strapped display maker in September, said.
A deal would ease the immediate risk of cash shortages after Harvest Group, a Chinese investment company, withdrew from the investor consortium of bailouts.
Hong Kong-based Oasis Management still plans to invest $150m-$180 million, while Japan Display’s main client, reportedly Apple, plans to invest $200m, Japan Display said.
The Japanese display maker has been losing money for the past five years as a belated shift to organic light-emitting diode (OLED) screens has cost it many Apple orders. Apple accounted for 60.6 per cent of Japan Display revenue in the last fiscal year to March.
Kikuoka said major customers had “more orders for LCD screens than originally planned.” Before that, Apple had asked suppliers to increase production of its iPhone11 models by about 10 per cent.
Kikuoka also said it had started producing OLED screens. Japan Display will produce OLED screens for Apple Watch this year, according to sources.
When asked about the mass production of OLED panels for smartphones, he said the company would seek business partners or investors and avoid overcapacity.
If you just look at the OLED panel category, Samsung will still dominate this category with 59% of the market in 2021. But LG, which ranks second, has narrowed the gap with Samsung, and LG now has a 23% share of the OLED market. BOE had a significant growth in 2021, with iPhone 12 Universe 13, Huawei and Glory smartwatch all significant drivers of its OLED market growth.
But in the second half of 2021, the market began to change. In fact, from the perspective of cyclical changes in supply and demand, this is also inevitable. When supply falls short of demand, many manufacturers begin to increase horsepower production when they see market opportunities, and prices are still rising; in addition, when the supply chain of the semiconductor and display industry is very long and the terminal demand side is saturated, the perception of the upstream is often a few beats slower. Eventually, the situation of oversupply will be reached; the industry will begin to enter a downward period and production will contract. And after a period of time to enter a new round of supply exceeds demand.
However, in the past two years, the market variables are more diverse than usual, such as the typical macroeconomic environment is not ideal. The unfavorable macroeconomic environment, the continuous promotion of production capacity and the rise in prices have all led to a decline in the demand for televisions, tablets and mobile phones.
Sales prices began to decline as capacity grew by double digits almost every quarter of 2021. Prices rose by as much as 172% in the first half of 2020 and 2021, so they fell by as much as 54% in the second half of the year, and this trend continues. Ross Young here there is no distinction between LCD and OLED, the main body of the decline is obviously LCD. The 2021 Q4 has become the largest quarterly decline in LCD prices in the history of FPD (flat panel) (32% from the previous quarter). By the end of this year, the average price of all kinds of Q1 LCD TV panels has been about 6 times lower than that of OLED. The next fall in the price of Q2 LCD will continue, although the decline in March has been very mild.