Japan Display will supply organic light-emitting diode (OLED) screens for the Apple Watch later this year, Reuters reported.
The OLED supply deal is expected to be a breakthrough for the cash-strapped company whose late shift to OLED has cost it orders from Apple.
Apple is the number vendor in the worldwide wearable device market by shipping 16.2 million devices in Q4 2018. Apple shipped 10.4 million Apple Watches in Q4 2018, as per a research report from IDC.
The supply contract would mark Japan Display’s foray into the OLED display market.
Japan Display’s mainstay liquid crystal display (LCD) business has been slumping due to Apple’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. The newer, OLED technology is generally thinner and allows more flexibility than LCD screens.
Apple supplier Japan Display earlier said it aims to raise $990 million in new financing.
Japan Display, one of the world’s top vendors of liquid crystal display (LCD) panels used in iPhones, has been hurt by a slowdown in iPhone sales and a proliferation of new models that use newer, organic light-emitting diodes (OLED).
Japan Display said it is aiming for a total capital increase of 110 billion yen or $990 million. As much as 80 billion yen of that would be through issuance of stocks and bonds to external investors.
Japan Display has relationships with smartphone vendors, including Huawei, Xiaomi, and OPPO.
But it is losing their orders too as sales growth softens and the Chinese players switch to domestic panel makers such as BOE Technology and Tianma Microelectronics, which have sharply improved the quality of their screens.
Japan Display supplied almost a third of Huawei’s smartphone screens in 2015, but its share had plunged to 4 percent by the third quarter last year as the Chinese company turned to BOE and Tianma, according to researcher IHS Markit.