According to the Nikkei business daily report on Friday, TOKYO – Cash-strapped Japan Display Inc is discussing the sale of its main smartphone screen factory to Apple Inc and Sharp Corp or as much as $820 million.
Sharp, a unit of Taiwan’s Foxconn and which like Japan Display is also a supplier of phone screens to Apple, announced that it was considering the purchase of the plant after receiving a request from a client it did not identify.
Sharp mentioned in a statement that “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 also announced that this company was considering all options for its plant in Hakusan City, Ishikawa prefecture in western Japan, but that nothing has been decided.
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 maker of advanced LCD screens owes Apple more than $800 million for the $1.5 billion costs of building the plant four years ago.
According to the Asahi newspaper report, 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.
The company said that it plans to receive up to 90 billion yen in financial support from Ichigo Asset Management, giving the Japanese asset manager effective control, this month.
For the past five years, Sharp has lost money 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.