People believe that Apple has contributed to the bailing of Japan Display. The supplier was struggling financially, and apparently, Apple purchased LCD manufacturing equipment worth $200 million from its Hakusan City plant in central Japan.
Rather than the physical transportation of equipment, it’s more of an ownership transfer. The $200 million that Apple is paying Japan Display is acting to lower its debt to Apple.
Apple provided Japan Display with $1.5 billion to build the Hakusan plant. According to Reuters, there is still $800 million that Japan Display owes Apple.
Japan Display announced the deal through a corporate press release. It only referred to the other party as “the customer” or “the transferee.” Reuters reports say that sources state Apple as the purchaser.
The report said: “[Japan Display] announces that it has finalized and concluded the agreement with the Customer to transfer a part of the equipment at the Hakusan Plant.” It continued with: “The transferee, or the Customer, is an overseas corporation who is one of JDI’s main customers. However, due to a nondisclosure agreement, JDI has with the transferee, details concerning the transferee cannot be disclosed.”
The book value of the equipment to Japan Display is zero since the plant’s operations have been suspended ever since July 2019.
The intention behind building the Hakusan Plant in 2015 was to dedicate it to the production of LCD panels for Apple gadgets. Apple agreed to pay most construction expenditures on the condition that Japan Display provides them with a certain percentage of screen sales over the years. However, since then, Apple shifted from LCD screens to OLED screens.
Japan Display still makes LCD panels for devices like Apple 11. However, with Apple shifting technologies, other companies are also doing so. This has resulted in a lot of LCD production ceasing rapidly.