Japan Display has agreed to sell a smartphone screen plant in central Japan to Sharp for $390 million, raising funds to repay debt it owes Apple for the plant construction costs.
The company said it will also sell screen plant equipment at the liquid crystal display (LCD) factory to an overseas customer for $285 million. Sources said the customer is Apple.
Japan Display owes Apple $702.5 million for the $1.5 billion cost of building the plant five years ago. The Japanese supplier said the $675 million raised from the manufacturing plant and equipment sale would be used for repayment, Reuters reported.
Sharp, a supplier of sensors, camera modules and LCD screens for Apple’s iPhones, is buying the central Japan plant at the request of Apple and plans to consolidate its iPhone panel production there, Reuters reported.
Sharp, a unit of Taiwan’s Foxconn, has been operating its own smartphone panel plant almost at full capacity, in part due to the popularity of Apple’s new lower cost iPhone SE.
Sharp will use the vacated smartphone panel lines at its existing LCD plant to boost production of panels for autos and medical equipment.