The latest news in the long-running Japan Display saga is that Apple’s $200M investment in the company has now been finalized. Rather than a cash injection, the iPhone maker is purchasing equipment to be used by the display maker …

Background

For anyone fuzzy on the details, here’s a recap we prepared earlier.

The story begins back in 2016. Japan Display found its LCD orders falling dramatically as smartphone manufacturers began the shift to OLED. The company didn’t have the capital needed to build OLED production lines, which are expensive to create, so needed a $636 million government bailout to keep the company afloat and let it finally invest in OLED.

Apple took a leisurely journey toward OLED screens, starting with the Apple Watch in 2015, followed by the Touch Bar on the MacBook Pro the following year, and then its first OLED iPhone, the iPhone X in 2017.

The iPhone maker was keen to diversify its OLED supply chain away from Samsung as its sole supplier, but the market was growing increasingly competitive, with Sharp, LG, and BOE all hoping to win Apple business. Japan Display, in the meantime, was still struggling to raise the capital needed for large-scale OLED screen production.

A second bailout was announced, initially for $723 million, though with a wide variety of numbers subsequently bandied about. Things looked good for a while as that plan was “confirmed,” and the company won orders for Apple Watch screens. Apple agreed to assist the company by waiting for repayment of a $1.5 billion loan made to the company years earlier to fund LCD production.

However, things started unravelling when a major backer exited the rescue plan. Apple agreed to chip in $100 million to help balance the books, but OLED iPhone displays still looked to be at least two years away.

A second backer then withdrew in September – this time, the one leading the consortium – before Apple agreed to contribute $200M.

Apple’s $200M investment appeared to provide reassurance, as an asset manager then agreed to put in a further $830M.

Apple’s $200M investment not a cash one

Reuters reports that the troubled display maker will now owe Apple more than a billion dollars.

Japan Display said on Tuesday it has finalised a deal to raise $200 million from “an overseas customer,” which sources have said is Apple.

The $200 fund will come in the form of the customer purchasing equipment at Japan Display’s main smartphone screen factory in central Japan, the company said in a statement.

As Japan Display owed Apple more than $800 million as of last year for the $1.5 billion cost of building the plant, the fund to be raised would be used for repayment, the sources have said.

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