Link: http://asia.nikkei.com/Business/Com...ng-in-red-ink-after-missing-Apple-wave?page=1
The relevance of this news is that Japan Display Inc. is the supplier of the LCD screens for the Nintendo Switch. The following has occurred.
Reports of having a net loss for the third year in a row:
Repeatedly bad financial performance:
Loss in LCD panel sales due to production yields:
Plans for boosting sales for LCD panels in other electronic devices look pessimistic:
Expected losses in sales next financial year due to Apple switching over to OLED panels:
Expecting losses of LCD sales due to Apple's influence towards Chinese Smartphone makers:
Lateness in anticipating the shift to OLED panels:
The competition Japan Display have to deal with for OLED panels:
Quick summary of who Japan Display Inc. are and a change in leadership next month:
Keep in mind that Japan Display were already bailed out at the end of last year:
The shift to OLED production worldwide means we could finally have more devices with OLED screens at cheaper costs in the next few years.
For example, Sony have come back to OLED TVs and are releasing on June 10 the Bravia A1 (A1E for US) which is an OLED TV (OLED panels supplied by LG Display, Sony no longer manufacture them in-house) with no conventional speakers. It uses the OLED screen itself to generate sound by using vibrations. This is apparently a patent​ed technology from Sony called Acoustic Surface, it saves space making the TV look slimmer.
The relevance of this news is that Japan Display Inc. is the supplier of the LCD screens for the Nintendo Switch. The following has occurred.
Reports of having a net loss for the third year in a row:
The major LCD panel manufacturer on Wednesday reported a group net loss of 31.6 billion yen ($277 million) for the year ended in March. The third consecutive year of net losses came despite Chairman Mitsuru Homma expressing hope for a annual profit as recently as February.
Repeatedly bad financial performance:
Japan Display continued a familiar pattern, having repeatedly downgraded earnings forecasts since its stock listing in 2014. President Shuji Aruga said at the earnings briefing that he felt "greatly responsible" for the disappointing result. Homma was a no-show.
Loss in LCD panel sales due to production yields:
The red ink sprung mainly from the business of supplying liquid crystal display panels for smartphones, which generates roughly 80% of the company's sales. Japan Display struggled to keep output flowing smoothly, beset by delays in improving the production yield of a new type of panel.
Plans for boosting sales for LCD panels in other electronic devices look pessimistic:
Japan Display said during Wednesday's briefing that it aims to counter the setback in smartphone panels by boosting sales of LCD panels for other electronic devices, such as automotive displays. But this segment looks unprepared to deliver, accounting for only around 10% of the company's sales.
Expected losses in sales next financial year due to Apple switching over to OLED panels:
Apple, the source of roughly half of Japan Display's sales, is expected to use an OLED panel on the iPhone for the first time with the new model set for release in the fall. This change could sink Japan Display's fiscal 2017 sales by 20% compared with a year earlier, according to some estimates.
Expecting losses of LCD sales due to Apple's influence towards Chinese Smartphone makers:
Apple's shift toward OLED panels likely will prompt Chinese smartphone makers to follow suit, since they have grown by imitating the U.S. tech giant. This poses a serious threat to Japan Display's plan to capture market share for its LCD panels among high-end Chinese-made models.
Lateness in anticipating the shift to OLED panels:
With its eyes fixed on LCDs, Japan Display kicked off production at a 190 billion yen panel plant in Japan's Ishikawa Prefecture in December. Though the company has the technology to manufacture OLED panels, it is unable to ready production in time to supply them to Apple in 2018, Aruga said, in essence admitting management's failure to anticipate a major shift in the industry.
The competition Japan Display have to deal with for OLED panels:
Samsung, by contrast, has invested billions of dollars to raise its OLED production capacity. Fellow South Korean manufacturer LG Display is expected to begin supplying Apple in 2018.
Quick summary of who Japan Display Inc. are and a change in leadership next month:
Japan Display was created five years ago through a merger of the LCD panel operations at major Japanese electronics manufacturers under the lead of the Innovation Network Corp. of Japan. Still the top shareholder, the public-private investment fund has enlisted Nobuhiro Higashiiriki, president of Japanese OLED panel developer JOLED, to take the helm at Japan Display next month to try to change course.
Keep in mind that Japan Display were already bailed out at the end of last year:
Japan Display Inc. on Wednesday said it would receive ¥75 billion ($636 million) in aid from its largest shareholder, the government-backed Innovation Network Corp. of Japan.
The shift to OLED production worldwide means we could finally have more devices with OLED screens at cheaper costs in the next few years.
For example, Sony have come back to OLED TVs and are releasing on June 10 the Bravia A1 (A1E for US) which is an OLED TV (OLED panels supplied by LG Display, Sony no longer manufacture them in-house) with no conventional speakers. It uses the OLED screen itself to generate sound by using vibrations. This is apparently a patent​ed technology from Sony called Acoustic Surface, it saves space making the TV look slimmer.