TOKYO Japan Display Inc (6740.T) will pay more than $100 million to boost its stake in an organic light-emitting diode (OLED) panel maker, the Nikkei business daily said - a step that would improve its position in a key technology where it lags far behind rivals.
Manufacturers of consumer and other electronics are increasingly looking to adopt OLED screens, which are generally thinner and more flexible than liquid crystal display (LCD) screens. South Korean display makers in particular are investing billions of dollars in production lines.
Japan Display will raise its stake in Tokyo-based Joled to more than 50 percent from 15 percent by the end of 2017 and will also receive 75 billion yen ($650 million) from a state-backed fund to expand its LCD and OLED businesses, the Nikkei said - a report that sent its shares surging 5 percent.
Japan Display and Joled declined to comment. Representatives for the state-backed fund, the Innovation Network Corp of Japan, which owns 75 percent of Japan Display, were not immediately available to comment.
The company, which has been looking to invest in advanced screens for cars and gaming headsets as growth in the smartphone market slows, set up a pilot OLED production line in 2014 and plans to start mass production of OLED screens for smartphones by 2018.
Japan Display's finances have withered on fluctuating demand from Apple Inc (AAPL.O), prompting the company to request support from INCJ this year after a funding crunch saw it take out short-term loans.
But even with help, Japan Display is likely to be one of the smaller players in OLED.
By comparison, LG Display Co Ltd (034220.KS) said last year it would invest 10 trillion won ($8.6 billion)in a new plant to make the ultra-thin panels. Samsung Display, a unit of Samsung Electronics Co Ltd (005930.KS) that's the largest maker of OLEDs for smartphones, is investing 4 trillion won by 2017 in an OLED production line.
Domestic competitor Sharp Corp (6753.T) said in August it will spend $570 million on its OLED business.
($1 = 115.0800 yen)
($1 = 1,166.0000 won)
(Reporting by Thomas Wilson in Tokyo; Additional reporting by Anya George Tharakan in Bengaluru; Editing by Edwina Gibbs)