The IPO for the world's largest smartphone display supplier did not go
swimmingly on Wednesday.
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| After rough IPO, concern for Apple supplier Japan Display |
japan Display, the world's largest smartphone display supplier, had a rough
IPO on Wednesday.
When Japan Display (JDI) listed its shares in a $3.1 billion initial public
offering Wednesday, the price at opening dropped 15 percent below the IPO price,
as reported by Nikkei.
This despite the fact that the IPO price of 900 yen (about $8.87) was at the
lower end of the suggested IPO range, according to The Wall Street Journal.
And the share price got as low as 706 yen on Wednesday.
"The [IPO] pricing was wrong," Amir Anvarzadeh, director of Japan Equity
Sales at BGC Partners, said in CNBC interview.
"They're very focused on the smaller screens, low-temperature polysilicon,
which is still good business," he said. JDI's low-temperature polysilicon
technology is used in Apple'siPhone 5S display.
"[But] in the case of small screens [and] low-temperature polysilicon, we're
seeing the Taiwanese coming [on] and the Koreans have moved on to AMOLED," or
active-matrix organic LED, according to Anvarzadeh. The latter is used by
Samsung on its popular Galaxy smartphones, for example.
JDI is a merger of the display businesses of Sony, Toshiba, and Hitachi, all
of which had been crippled by losses in their respective small display
businesses.
The merger -- which received major financial backing and support from the
Japanese government -- looked doomed at first, but eventually, in 2010, the
company was formed.
Subsequently, JDI became a major supplier of displays for Apple's iPhone.
For the nine months through December, Japan Display reported a profit of 33.5
billion yen ($331 million), exceeding the previous full year profit by about 10
times, according to the Wall Street Journal.
JDI has about 16 percent of the smartphone display market, the largest share
of any one company.
"The question mark is what happens after this year when [Taiwanese] companies
like AU Optronics (AUO) begin to bring supply in?" Anvarzadeh asked, who said
repeatedly during the interview that the Taiwanese are just now beginning to get
their production yields to levels that are competitive with market leaders like
JDI.
