Coronavirus: Japan Display to bring some panel production back from China

The world's largest automotive screen maker produces panel cells in Japan and ships most them to its Chinese plant, where other parts are added

An attendant demonstrates the touch panel function on a reflective LCD, developed by Japan Display, at a media event in Tokyo. Bloomberg

Japan Display aims to bring some automotive panel production back to Japan after the Covid-19 outbreak disrupted its supply chain in China, a company executive said.

Under the plan, Japan Display would boost production at its plant in Tottori, western Japan, to supply panels to major Japanese automakers, Kazutaka Nagaoka, chief manufacturing officer of the company, said in an interview on Friday.

"We could have spared opportunity losses if we had our production in Japan," Mr Nagaoka said, referring to production disruptions at its Chinese plant due to a coronavirus lockdown this year.

Mr Nagaoka declined to give a timeframe or an amount for the investment in the production shift, but said the company hoped to make a final decision on the plan as quickly as possible.

The world's largest automotive screen maker produces panel cells in Japan and ships most them to its Chinese plant, where backlights, connectors and other parts are added - a labour-intensive process that requires constant manual work.

Mr Nagaoka said advancements in machinery had helped automate the back-end processes, reducing labour costs even if they are done in Japan.

Its automaker clients also want their panels produced at automated lines for quality control reasons, he said.

Japan Display, which earns about 60 per cent of its revenue from iPhone manufacturer Apple, is aiming to beef up its automotive display business to reduce its dependence on the saturated smartphone market.

The company has agreed a deal to receive up to $1 billion (Dh3.67bn) from Japanese investment manager Ichigo Asset Management, a critical bailout for the company that has long been dependant on publicly funded rescues.