TOKYO - Japan Display (JDI), formed in 2012 through the merger of Hitachi, Toshiba, and Sony’s small and medium-sized LCD panel businesses, was once celebrated as the “Hinamaru LCD” and symbolized Japan’s national pride in the sector. By the fiscal year ending March 2016, its sales neared 1 trillion yen. However, its fortunes soon reversed, and it has now posted losses for eleven consecutive years.
From the start, Japan Display’s management struggled to maintain momentum. The initial enthusiasm surrounding its creation stemmed from Japan’s attempt to challenge the dominance of South Korean and Taiwanese manufacturers like Samsung and LG, which were rapidly expanding in the small and medium-sized LCD panel market for smartphones and tablets. At that time, the public-private fund Innovation Network Corporation of Japan (then known as INCJ, now called INCJ Ltd.) became the main shareholder, and JDI was promoted as a national project aimed at revitalizing Japan’s electronics industry.
The timing coincided with the global smartphone boom, especially driven by the rapid expansion of Apple’s iPhone, which adopted JDI panels for its displays. This allowed JDI to grow rapidly in its early years. Many Japanese media outlets highlighted how key components of the iPhone were sourced from Japan, further boosting JDI’s image.
However, as OLED displays—offering lower power consumption and superior performance—became widespread, JDI’s reliance on LCD technology became a liability. The company, heavily invested in LCD production, fell behind in this technological shift. One key vulnerability was its dependence on Apple, which accounted for a large share of its business. In response to Apple’s early demand, JDI built the Hakusan plant in Ishikawa Prefecture. But as Apple’s orders sharply declined, the facility became a financial burden.
JDI recorded operating profits up to the fiscal year ending March 2017, but with Apple shifting to OLED and other suppliers, its earnings rapidly deteriorated. Since then, JDI has remained in the red, recording losses for eleven consecutive years through March 2025. In 2019, the company faced a serious financial crisis, entering a state of negative net worth where its liabilities exceeded its assets—a near-bankruptcy situation.
JDI has now announced further restructuring. By March 2026, it plans to halt production at its Mobara plant in Chiba Prefecture and reduce its domestic workforce by more than half, cutting about 1,500 jobs. Downsizing alone, however, will not lead to recovery. The company recognizes that it must pivot to new products. JDI is focusing on next-generation micro displays and other niche markets, primarily producing at its Ishikawa plant in Kawakita Town.
For the fiscal year ending March 2027, JDI forecasts sales of 80 billion yen—less than one-tenth of its peak—but aims to secure profitability by narrowing its business focus. The company is now targeting specialized markets such as in-vehicle displays using next-generation OLED technology. Yet competition remains fierce, especially against dominant South Korean and Chinese manufacturers who maintain substantial investment capabilities that JDI, with its diminished financial resources, cannot easily match.
The struggle of Japan Display also highlights broader concerns about Japan’s public-private investment funds. As of fiscal 2023, 14 out of 23 government-backed funds had accumulated losses, with total deficits exceeding 190 billion yen. While INCJ has managed an overall surplus across all its investments, projects like Japan Display remain problematic.
Public-private funds often face criticism for investing in projects that private capital avoids due to high risk or uncertain profitability. While these funds are intended to support industries crucial to national security and economic independence, their track record raises questions about their effectiveness. Nationally promoted projects labeled as “Hinamaru” or “government strategy” often struggle to achieve lasting success.
At the same time, there is growing awareness that Japan cannot afford to neglect strategic sectors amid intense competition from state-supported giants in China and South Korea. Sectors tied to economic security, such as semiconductors, are receiving renewed government focus. Projects like Rapidus—a government-backed semiconductor foundry aiming to revive Japan’s advanced chip manufacturing capabilities—are seen as crucial tests of whether Japan can successfully reestablish its technological edge. However, even these efforts face formidable global competition and massive financial challenges.
Source: Kyodo
