TOKYO (Reuters) - Japanese auto parts maker Denso Corp is considering a 50 billion yen ($440 million) investment in organic light-emitting diode (OLED) panel maker JOLED, Kyodo news reported, citing sources close to the matter.
JOLED, majority owned by a state-backed technology investment fund, sold its inaugural batch of OLED screens this month, and has said it wants to raise 100 billion yen by the end of March to expand its currently limited capacity.
The move comes amid the growing popularity for OLED screens, which are generally thinner and can show more vivid colors than liquid crystal display (LCD) panels. Smartphone makers have been shifting to OLED, including Apple Inc which has adopted them for its iPhone X.
Cash-strapped domestic display makers such as Japan Display Inc, which has a 15 percent stake in JOLED, and rival Sharp Corp are struggling to respond to the shift, letting Korean rivals Samsung Electronics Co Ltd and LG Display Co Ltd take the lead.
The Nikkei reported earlier this month that Japan Display had considered investing in JOLED but decided it did not have the funds. Japan Display has said it wants to start mass-producing OLED screens to better compete with Samsung and that it needs capital to do so but has so far declined to disclose details of any negotiations.
Kyodo’s report said that Sony Corp and Panasonic Corp, which both own 5 percent in JOLED, are also expected to invest 5 billion to 10 billion yen each.
Sumitomo Chemical Co and Screen Holdings Co are considering chipping in, and the four companies are together seen investing 20 billion to 40 billion yen in JOLED, Kyodo said.
A JOLED representative said the company was in talks with various materials and equipment makers about the investment, but that nothing specific had been decided.
A Denso spokesman said the reported plan wasn’t something the company announced, while a Screen Holdings spokeswoman denied the company was considering the investment. Sony said nothing had been decided, while Panasonic and Sumitomo Chemical declined to comment.
JOLED was created in 2015 by merging the OLED divisions of Sony and Panasonic.
Analysts have said it lacks the scale and expertise of display makers which have smartphone-size panels. JOLED is 75 percent owned by state-backed fund, the Innovation Network Corporation of Japan.
Reporting by Naomi Tajitsu, Yoshiyasu Shida and Ritsuko Ando; Writing by Minami Funakoshi; Editing by Chang-Ran Kim and Muralikumar Anantharaman