Japan Display abandoned plans to invest in Taiwanese startup PanelSemi, marking another setback for the struggling panel maker that has posted losses for over a decade.
The Japanese manufacturer terminated a memorandum of understanding signed in February, citing “recent intensification of geopolitical risks surrounding the semiconductor industry,” the company said Monday. The companies will continue collaborating on semiconductor packaging and sensor technologies despite halting the equity investment.
The decision underscores how broader US-China tensions are rippling through Asia’s technology sector. Taiwan’s dominance in advanced chip manufacturing has made it a strategic flashpoint, with any disruption potentially affecting global technology supply chains. The island produces more than half of all semiconductors and 90% of the most sophisticated chips.
For Japan Display, the retreat reflects deeper troubles beyond geopolitical concerns. The company posted a net loss of ¥78.2 billion ($538.7 million) for fiscal 2024, widening from the previous year’s ¥44.3 billion loss. The display maker has struggled with 11 straight years of losses due to its declining LCD business.
Chief Executive Scott Callon resigned last month, with the company planning to cut about 1,500 jobs in Japan—nearly 60% of its domestic workforce. The PanelSemi partnership was meant to help Japan Display diversify into advanced semiconductor packaging, but those ambitions have now been curtailed by the deteriorating geopolitical environment.
