America and Japan may join forces to manufacture displays in the US — New $13 billion fab proposed by Japan Display Inc. To counter Chinese dominance

Japan Display Inc. (JDI) has proposed a new state-of-the-art display factory to be set up in the U.S., in collaboration with the Japanese and American governments. This factory would be worth up to $13 billion, according to the initial reporting by Nikkei Asia. Reuters has now confirmed that Washington and Tokyo are in active talks to explore this idea. Just this confirmation made JDI's stock surge 80% on Monday.

Neither state, nor JDI itself, has said anything about this publicly, but it's being heavily inferred from industry sources. Both Japan and America lack a modern, large-scale display factory whereas China has become a global superpower in the segment as of late. Market leaders Samsung and LG operate out of South Korea — the other dominant display region — but the China holds the likes of BOE, TCL CSOT, and HKC.

This new factory, therefore, would be aimed at not only strengthening Japan-U.S. Ties, but will also rival the high-volume, low-cost production China has mastered. It could potentially reduce foreign reliance, which is a national security concern as well, while bolstering domestic manufacturing capabilities.

The plant is being considered as part of a broader $550 billion investment framework that Tokyo has planned for the United States. While the U.S. Was never a hotspot for display production, Japan was once seen as the industry giant thanks to pioneers such as Sharp, Panasonic, Sony, Toshiba and Hitachi. In fact, JDI was created in 2012 by merging the LCD units of Sony, Toshiba, and Hitachi with government backing.

Since then, JDI has struggled, and even reported net losses for ten consecutive years. The inflection point came when Apple switched to OLED screens on the iPhone, because JDI was the main supplier for its LCDs before. Moreover, JDI is not state-owned, but it is indirectly backed by the Japanese government — similar to JOLED, another financially-troubled display firm that went bankrupt in 2023.

Despite Japan's withering display industry, JDI has avoided bankruptcy itself due to repeated support from state-backed funds. Building a new display factory is extremely expensive, so partnering with Washington makes sense from both a financial and geopolitical standpoint. For now, JDI has focused on the automotive sector with innovations in car displays, so only time will tell what this proposed factory produces.

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