Dive Brief:
- Display maker OLEDWorks plans to establish a manufacturing hub in the U.S. as part of a strategic investment from Japan Display, Inc., a major screen supplier for Apple Watch and other consumer products.
- The companies will build an advanced display research and development center and fabrication plant to meet demand for special displays used by the U.S. defense, automotive and medical industries, according to a news release. OLEDWorks declined to comment on the size, investment value or location of the facility.
- The companies said they plan to leverage JDI’s technology and manufacturing expertise with Rochester, New York-based OLEDWorks’ American presence as part of the collaboration. It will be the “first of its kind” display fabrication plant in the Western Hemisphere, according to the release.
Dive Insight:
Organic light emitting diode technology is used in many of today’s devices, including TVs, smart phones and computer monitors, which are brighter and more efficient than LED screens. However, an issue display makers are running into is that larger, mass-market screens are not as profitable as smaller, specialized displays.
“The economics worsen over time. That is a huge challenge of being in markets where there’s an enlargement principle on the customer side where they prefer bigger,” Scott Callon, chairman and CEO of JDI said in an earnings call Feb. 13. The company’s Q3 sales fell 20% compared to last year, driven by decreased LCD smartphone and virtual reality shipments. JDI and other LCD display suppliers lost their Apple iPhone contracts last year after failing to keep up with demand for new OLED screens, Nikkei Asia reported.
To shore up costs, JDI has implemented a “beyond display” strategy focused on semiconductor, sensor and micro-display manufacturing. In Japan, the company is going to end production at a Mobara fabrication plant in 2026 and consolidate operations with its Ishikawa facility. It is also collaborating with OLEDWorks on increasing display production in the U.S.
“This is not only about putting up a brand new fab, it’s about building an ecosystem to support it,” Callon said in the call.
JDI told investors the strategic investment and fabrication partnership will have a minor impact on its latest quarterly earnings and should be a “significant earnings and value driver over time.”
An OLEDWorks spokesperson declined to disclose investment details, but said to expect more information about its plans in the coming months. JDI Display America, Inc., a wholly-owned subsidiary of JDI, owns 6.7% of OLEDWorks shares, according to the investor note.
OLEDWorks is the only major OLED maker outside of Asia, with manufacturing in Germany and research and development in Rochester. JDI was created in 2012 as part of a merger of Sony, Hitachi and Toshiba’s global display technology businesses.
