Japan Display is planning to build a $1.7bn facility in Japan with financial backing from its client Apple.
The plant is likely to be constructed in Ishikawa in central Japan, and is expected to have more production capacity than its present facility in Mobara, southeast of Tokyo, a source familiar with the matter told Reuters.
The existing Tokyo based facility produces 50,000 units of the 1.5 by 1.85 metre sheets a month for its clients including Apple.
Japan Display aims to become the main supplier of screens for Apple’s iPhones, and it is reportedly in talks with Apple to provide the majority of the $1.7bn investment.
Japanese display suppliers including Japan Display and Sharp are facing tough competition from low cost Chinese handset makers; as a result, the companies are expecting losses for the current financial year, reported the Financial Times.
The companies are reportedly planning to expand beyond hi-end clients and supply their products to Chinese smartphone makers, but the expansion has been slow.
According to reports, if the deal fails to materialise, then Apple is likely to look for other partners including Taiwanese supplier Hon Hai Precision Industry.
JDI said: "While JDI constantly pursues opportunities to strengthen its competitiveness including building of new manufacturing plant, no formal decision has been made regarding any matter that we need to disclose."