JDI to invest 30 billion yen for doubling its capacity of smartphone-size panels, leaving its Taiwanese rivals behind

1 May

Japan Display Inc. (JDI) on April 24 announced a shuffling at the top management level, with its current CEO and President Shuichi Otsuka resigning this June. Shuji Aruga, the current COO, will be promoted to president, and Mitsuru Homma will take over as both the CEO and chairman. JDI is the world’s second largest manufacturer of medium and small-size display panels.

The April 25th edition of The Nekkei published an interview held a day earlier between the newspaper and JDI’s upcoming president Aruga. According to the interview, Aruga stated his company will invest 30 billion yen within the next five years to boost the production capacity of high-resolution display panels, with the target set at 500 million smartphone-sized units. This phased expansion plan will also upgrade equipment for its Japan-based fabs in Mobara and Hakusan. The plant in Hakusan, Ishikawa Prefecture, is scheduled to enter mass production in 2016. Based on the conversion of Gen 6 glass substrate (1,500 x 1,800mm) into smartphone-sized screens, JDI is expected increase its monthly capacity of high-resolution panels by 70,000 units when the Hakusan plant is on line. In sum, JDI’s present capacity is likely to double in the near future.

Aruga said JDI along with Sharp and LG Display are being threatened by Taiwanese, Chinese, and other newly formed panel makers. These emerging rivals are accelerating their R&D in the mass production of high-resolution panels in order to grab market shares from the dominant industry players. JDI’s counter-strategy, according to Aruga, is to create a scale advantage in manufacturing that is too overwhelming for its competitors.

The reporting from The Nekkei also reveals that JDI will include manufacturing display panels for automobile application as part of its core businesses. Plants in Mobara and Tottori will be upgraded to produce panels of this type. Thus, JDI will operate under a two-pronged approach. Aruga will be focusing on the existing business of providing display panels to smartphone vendors such as Apple. Homma, JDI’s new CEO, will be responsible for developing the client base for panels used in automobiles. Homma is the former executive vice president of SANYO and led its lithium battery unit.