Japan Display Inc will begin to supply organic light-emitting diode (OLED) screens for the Apple Watch later this year, two sources said, a breakthrough for the cash-strapped company whose late shift to OLED has cost it orders from Apple.
The supply deal would mark Japan Display's foray into the OLED display market, the two sources familiar with the matter said, declining to be identified because they are not authorized to speak to the media.
A spokesman for Japan Display said he could not comment on specific customers.
Japan Display's mainstay liquid crystal display (LCD) business has been slumping due to Apple Inc's recent shift away from LCD, and disappointing sales of the iPhone XR, the only LCD model in Apple's 2018 line-up.
The OLED display market is dominated by Samsung Electronics unit Samsung Display and LG Display, with Chinese players quickly catching up. OLED displays are generally thinner and allow more flexibility than LCD screens.
Samsung Display is currently the exclusive supplier of OLED panels for iPhones, while LG Display provides a majority of panels for the Apple Watch.
Hiroshi Hayase, senior director at IHS Markit, said it is a positive step for Japan Display, but added that the company would face a tough road ahead.
“Hurdles would be high to win orders for iPhones,” Hayase said. “Samsung Display has built up its experience, technologies and production capacity over more than a decade. Can Japan Display really compete with such a rival and make ends meet?”
Shares of Japan Display jumped as much as 7.6 percent in Tokyo trade on Wednesday after the Reuters report. The stock finished up 6.3 percent at 84 yen.