Apple is discussing a deal with Japan Display to acquire one of its primary display-making factories, according to Nikkei.
Japan Display, which reportedly owes more than $800 million to Apple, discontinued operations at the Hakusan-based factory in July. Since the location serves no purpose, the supplier has offered both buildings and land in negotiations. Nikkei reports that Apple could acquire all assets for between $730 million and $820 million. Apple contributed nearly half of the factory's $1.5 billion construction cost.
When the factory opened in late 2016, the mobile industry started shifting away from LCD panels. Now, many flagship smartphones are shipping with OLED panels that feature better color accuracy and efficiency.
Some in-production iPhone models, including the iPhone 11 and last year's iPhone XR, still sport LCD-based displays while their high-end counterparts are all-in on OLED technology.
Additionally, Sharp has engaged in similar discussions. Foxconn, the parent company of Sharp, manufacturers several components used by Apple and other companies in their products. It does operate display-making factories currently, and Sharp could use Japan Display's Hakusan location to bolster production. The report suggests Sharp and Apple could partner together in a deal.
Should the deal include both Sharp and Apple, the Cupertino-based company will deepen its participation in the supply chain. Apple develops custom chips for iPhone, iPad, and Apple Watch, but future plans include in-house MicroLED displays replacing current options.
Talks between Japan Display and its potential suitors are ongoing, and Nikkei reports that no deal has been reached. Sharp appears as the more likely buyer, but don't rule out Apple if it feels like investing further in the supply chain. Next year, it seems all but certain Japan Display's Hakusan location will be owned and operated by another company.
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