Tokyo -- Japan Display Inc says it will cancel an agreement with Chinese display maker HKC Corp to jointly build factories in China to produce a next-generation organic electroluminescent display amid its customers' disapproval.
Under the agreement announced in April, the two companies aimed at starting mass production of the display in 2025, with HKC covering the costs for factory construction and JDI offering technological expertise.
But the Japanese company has decided to scrap the tie-up as some of its clients voiced concern over the plan in which HKC will play a leading role in the operation of the factories, JDI said.
The Japanese company still plans to build factories in China under a new scheme in which its customers shoulder some of the construction costs.
The display maker said it has decided to set up two factories in Anhui Province in eastern China.
The factories will produce a new type of EL display called eLEAP, which was developed by JDI and is of a higher quality than existing models in terms of brightness and product life.
"Our customers told us they want to buy directly from JDI," the company's CEO Scott Callon said in Japanese at an online press conference. "We will secure competitive production sites."
While canceling the tie-up, JDI will continue talks with HKC over a potential collaboration in the development of displays for cars, the company said.
© KYODO
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