Last Friday, Sharp announced it will invest 57.4 billion yen for the development of OLED production facilities, aiming to starting production by June 2018. This capital investment in OLED is part of 200 billion yen ($2 billion) that the manufacturer had already committed to OLED technology, part of a strategic plan it adopted with new owner Foxconn Technology Group, a provider of manufacturing services for Apple.
The funds will be used for new equipment in Sharp’s factories in Mie and Osaka, and to deliver sample products to customers, the company said in a statement, focused on delivering smartphone displays.
Following Sharp's announcement, U.S. maker of OLED screens Universal Display Corp. saw its stock fall as much as 8.4 percent on the same day.
“Apple’s general strategy is to increase the competition on the supply side, and dilute the risk exposure to one company”, according to Amir Anvarzadeh, Singapore-based head of Japanese equity sales at BGC Partners Inc.
Apple accounts for about 27 percent of Sharp’s revenue, according to Bloomberg’s supply chain analysis.