TOKYO - Japanese and U.S. officials are evaluating a plan to create a display fabrication plant on U.S. soil in partnership with Japan Display, as part of Tokyo's broader $550 billion investment package, two people with knowledge of the discussions said on Monday.
The proposed factory is intended to bolster American production of display technologies at a time when Washington is concerned about dependence on suppliers in China for screens used in military systems. Officials view the initiative as a way to re-establish a domestic footprint in panel manufacturing that has largely migrated overseas under intense price competition.
One of the people familiar with the talks said the display project is among several potential investments being discussed between Japan and the United States. Separately, the two countries are working to include a nuclear power initiative involving Westinghouse in a subsequent round of deals that form part of Tokyo's commitments under its tariff agreement with the United States, the person added.
Japan Display declined to comment on the reported discussions. The company's stock price jumped sharply on the news, rising about 80% in a single trading session and valuing the long loss-making firm at roughly 190 billion yen, or about $1.2 billion.
A report on the potential plan estimated the display project could be worth about $13 billion. Those figures remain part of ongoing discussions and have not been finalized, according to the sources.
Japan Display emerged in 2012 from a government-backed consolidation of the display divisions of Sony, Toshiba and Hitachi. The company was once among the leading suppliers of liquid crystal display (LCD) panels globally and served as the primary screen vendor for Apple's iPhone.
But market dynamics shifted as Apple moved to organic light-emitting diode (OLED) screens and Chinese manufacturers aggressively undercut prices. The combined effect of that technological transition and pricing pressure has left Japan Display operating at a loss for more than a decade.
In response to these challenges, the company is consolidating its domestic manufacturing footprint to concentrate resources on automotive display products and has decided to cease OLED panel production for the Apple Watch. The Japanese government had previously invested more than 460 billion yen in the company but exited its position last year, taking a loss of approximately one third of its original investment.
Industry research firm Counterpoint projects that China will expand its share of global display capacity from 68% in 2023 to 75% by 2028, a trend that highlights the scale of competition facing efforts to revive production outside China. Currency used in reporting: $1 = 158.6500 yen.
Implications: The prospective factory represents a targeted industrial policy effort to rebuild strategic manufacturing capacity in displays, with potential effects on defense procurement supply chains, automotive display suppliers, and broader technology manufacturing partnerships between the United States and Japan.