Japanese Government Considering Divesting Its Share in iPhone Display Supplier

After seeing that Japan Display has posted only losses in the past two business years due to strong competition, the Japanese government is considering divesting itself of its stake in the unprofitable manufacturer, reports the Wall Street Journal. Japan Display is an Apple supplier but apparently hasn’t managed to secure new contracts.

The move is rather interesting, as Japan has been reluctant to let major domestic companies into the hands of foreign companies, because they feared layoffs and technology leakage. But that’s about to change, according to Hiroshige Seko, a confidant of Prime Minister Shinzo Abe, who said this approach is outdated.

From Seko’s perspective, there are two possibilities: (1) it will be kept under Japanese ownership at all costs or (2) it will be sold to foreign companies.

Japan Display says it has tried hard to diversify its business, as it is strongly tied to the smartphone business and Apple. As you know, iPhone sales are falling, and the near future isn’t too bright, according to various analysts.

Japan Display has opened discussions about getting more financial support from its major shareholder, the government-backed fund Innovation Network Corp. of Japan.