Japan Display in talks to sell key smartphone screen plant to Apple, Sharp: Nikkei

TOKYO (Reuters) - Cash-strapped Japan Display Inc 6740.T is discussing the sale of its main smartphone screen factory to Apple Inc AAPL.O and Sharp Corp 6753.T for as much as $820 million, the Nikkei business daily reported on Friday.

FILE PHOTO: Japan Display's logo is seen at a display of its products at its headquarters in Tokyo, Japan October 7, 2019. REUTERS/Kim Kyung-Hoon

Sharp, a unit of Taiwan's Foxconn 2317.TW and which like Japan Display is also a supplier of phone screens to Apple, said it was considering the purchase of the plant after receiving a request from a client it did not identify.

“We are carefully considering it, reviewing the impact that any purchase would have on our earnings, and whether and how much risk it would entail,” Sharp said in a statement.

Apple did not immediately respond to a request for comment.

Japan Display said it was considering all options for its plant in Hakusan City, Ishikawa prefecture in western Japan, but that nothing has been decided.

The maker of advanced LCD screens owes Apple more than $800 million for the $1.5 billion cost of building the plant four years ago.

A sale of the entire factory would represent a shift from Japan Display’s statement this month that $200 million promised by a customer, which sources said was Apple, may come in the form of purchasing equipment at the plant.

The Nikkei put the potential sale price at 80 billion yen to 90 billion yen ($730 million to $820 million).

A separate report in the Asahi newspaper said Sharp aims to purchase the plant, which has been idle since July, by March of next year and that details would be worked out with Apple.

Japan Display’s shares rose as much as 8.2% in Tokyo trade on the reports, valuing the company at around 67 billion yen.

It said this month that it plans to receive up to 90 billion yen in financial support from Ichigo Asset Management, giving the Japanese asset manager effective control.

Taiwanese contract electronics manufacturer Wistron Corp 3231.TW is also set to take part in the bailout.

Japan Display has lost money for the past five years and reported its 11th consecutive quarterly net loss last month on sluggish display sales and restructuring costs.

Although a late shift to OLED screens has cost it orders from Apple and is responsible for much of Japan Display’s financial woes, the U.S. tech giant still accounted for about 60% of its revenues in the last financial year ended March.

Reporting by Chang-Ran Kim, Makiko Yamazaki and Rocky Swift; Editing by Edwina Gibbs