Japan Display Inc. (JDI), currently undergoing a management restructuring, announced on June 26 that it will raise approximately 95.6 billion yen by allocating new share subscription rights to its largest shareholder, Ichigo Trust. As part of a bold asset reorganization, the company will also transfer ownership of its Mobara plant and some of its patents to Ichigo. Could this be the definitive turning point in JDI’s long-running struggle for revival?
JDI’s Road to Recovery: Years of Struggles and Glimmers of Hope
JDI was once a leading force in Japan’s small-to-medium-sized LCD sector, boasting world-class technology. However, it has long been mired in losses due to the stagnation of the smartphone market and relentless price competition from Chinese and South Korean rivals.
In 2019, Ichigo Asset Management (now Ichigo Trust) stepped in as the top shareholder to support JDI’s turnaround. Since then, multiple capital infusions and restructuring efforts have been implemented, yet the company has not achieved a fundamental return to profitability.
What the Latest Fundraising Entails: Low-Priced Warrants and Asset Sales
The exercise price of the new warrants to be issued to Ichigo Trust is set at 25 yen—a significant drop from the 45 yen set for previous warrants. Given that JDI’s current share price hovers around 25 yen, these new warrants are more likely to be exercised.
At the same time, the funds raised from transferring the Mobara plant and related patents will be used to repay 65 billion yen in borrowings from Ichigo Trust, helping to restore JDI’s financial health. The raised capital will be channeled into the following strategic areas:
- High value-added displays (e.g., for medical and automotive use)
- Sensor development
- Mass production infrastructure for semiconductor packaging
This clearly shows JDI’s shift in focus from generic products to specialized, high value-added niches.
Key Points and Remaining Risks
- Risk of Shareholder Dilution
If the warrants are exercised, the total number of issued shares will increase significantly, reducing the ownership percentage of existing shareholders.
- Perception of Selling Off Core Assets
The Mobara plant and patents were once core assets. Their transfer could be seen as a last-ditch effort.
- Strengthening of Ties with Ichigo Trust
Ichigo’s role as a de facto parent company is becoming more apparent, further increasing its influence on JDI’s management.
Looking Ahead: What to Watch in JDI’s Next Chapter
This fundraising move suggests not just a lifeline, but a potential “second chance.” The key to success lies in whether JDI can pivot from the traditional mass-market LCD segment to high-end, high-functionality markets.
Can JDI, still regarded as a company with strong technological capabilities, truly compete in the high-value-added space?
How far can Ichigo Trust’s vision and execution drive JDI’s reconstruction?
The coming developments deserve close attention—not only as a business case but as a symbolic example of Japan’s efforts to revitalize its manufacturing sector.
Market watchers should keep a close eye on JDI’s stock price trends and the progress of its implementation plans.