JDI and JOLED to merge in last-ditch effort to promote Japan Display

In the 1990s, Japan was the leader in the global display technology market. With its first-mover advantage in the field of liquid crystal displays, Japan monopolized about 90% of the display panel market, and as many as nine companies participated in the manufacture and sale of liquid crystal panels. However, it was difficult to continue the prosperity. After the outbreak of the most serious economic crisis in Japan's history, Japan's display panel industry was overtaken by South Korea, and it has never recovered since then, embarking on a path of decline that has continued to this day.

After the acquisition of Sharp, the "Father of LCD", by Hon Hai Group in 2016, only two "young" companies, JDI and JOLED, remained in the Japanese display industry. JDI was established in April 2012 by integrating the small LCD departments of Sony, Toshiba and Hitachi; JOLED was established even later in January 2015 by relevant personnel after the termination of the OLED cooperation project between Sony and Panasonic. According to the latest report of Nikkei News, JDI is expected to complete the merger with JOLED in 2017. After the merger, the company will still keep the name of JDI, and the president will be Nobuhiro Toiri from JOLED.

Japanese panel companies fled around 2010

Around 2000, Japan's panel market share continued to decline

Originally, these two companies, relying on their own deep technical accumulation, maintained a relatively optimistic development prospect in the high-end LCD panel market and the emerging OLED panel market, respectively. However, the global display panel landscape has undergone new changes in recent years, mainly due to the rapid rise of Chinese display panel companies, which not only squeezed out competitors in traditional LCD display panels, but also showed ambition in the next-generation display technology market represented by OLED. Korean panel companies with the strongest display production capacity are playing well in the high-end and cutting-edge display market. Samsung SDC dominates the small and medium-sized AMOLED market with more than 90% share, and LG Display dominates the high-end large-size TV panel market (including LCD and OLED). The living space left for JDI and JOLED is getting smaller and smaller, and the strategy of jointly defending against the enemy has finally been implemented under the promotion of INCJ (Japan Industrial Innovation Agency, which holds shares in both JDI and JOLED).

The main driving force behind the merger of JDI and JOLED comes from INCJ (Industrial Innovation Corporation)

The new JDI after the merger will become the last "seedling" of Japanese display panels. The ideal plot may be like this: after integrating the essence of Japanese technology companies including Sony, Toshiba, Hitachi, Panasonic, etc., the new JDI quickly increased the production capacity of high-resolution small and medium-sized LCD panels, firmly grasped the orders of Apple, the big money maker, and achieved rapid growth in the automotive display, VR equipment and smart wearable markets; and timely improved the printing process of small and medium-sized AMOLED panels, greatly reducing the cost of AMOLED panels, and achieved a strong counterattack in the smartphone screen panel market.

However, the reality may go in a completely different direction: the small and medium-sized LCD panels with ultra-high PPI indicators developed by the new JDI cannot support the general market demand due to production capacity constraints. They have always maintained customized cooperation with a few brands in the high-end application field, and their profitability is insufficient. In the subsequent technology upgrades of Chinese manufacturers, they eventually fell into decline; on the other hand, the printing OLED panel technology has always been limited by the conservative and hesitant capital supply of the major shareholder INCJ, and it is difficult to form an effective scale. It can only watch China and South Korea profit from the evaporation OLED panel market. After a series of negative news, the new JDI was reluctantly abandoned by INCJ for sale, and Terry Gou's Hon Hai Group, China's BOE and Huaxing Optoelectronics joined the bidding...

Although this is a joke, there are lessons to be learned from the past. After Panasonic made the conservative mistake of "exclusive technology", plasma display eventually lost its survival space; Sharp also began to suffer huge losses year after year under the conservative policy of "not selling panels to outsiders". Most Japanese companies are good at manufacturing fine and high-quality products, which gives them sufficient confidence to participate in market competition. However, when such confidence turns into arrogance and conservative decision-making in business operations, the final outcome is often unbearable to say.

Comparing the development trends of the three major display panel export regions, China, South Korea and Japan, we believe that China has a strong growth momentum and its competitiveness covers the entire market of high, medium and low-end products; South Korea strictly controls the direction of cutting-edge technology and high-end product markets, and is a pursued country with a continuously shrinking leading edge; and Japan seems to be a little late in the game. Although its technology is not inferior, its rigid development strategy and conservative business thinking seem to have doomed the prospects of the merged new JDI to be bleak.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.