Japan Display : Concerning Capital & Business Alliances, New Share/CB Issuance thru 3rd-party Allotment, Largest Shareholder Change & Articles of Incorporation Amend

April 12, 2019

Notice Concerning Conclusion of the Capital and Business Alliance Agreement, the Business Alliance Basic Agreement, and the Business Alliance MOU,

Issuance of New Shares and Bonds with Stock Acquisition Rights through Third-party Allotment, a Change in the Parent Company and the Largest Major Shareholder and

Amendment of the Articles of Incorporation

Japan Display Inc. (the "Company") hereby announces that it has resolved at its meeting of the board of directors as of April 12, 2019 (the "Board of Directors Meeting") to enter into: (i) the CAPITAL AND BUSINESS ALLIANCE AGREEMENT with Suwa Investment Holdings, LLC (the "Expected Allottee") (the "Capital and Business Alliance Agreement"); (ii) the LCD Business Alliance Basic Agreement with TPK Holding Co., Ltd. ("TPK") toward business alliance on LCDs (the "LCD Business Alliance Basic Agreement"); and (iii) a Memorandum of Understanding toward formulating and implementing a business alliance with Harvest Tech Investment Management Co., Ltd. ("Harvest Tech") with respect to a plan for the mass production of evaporation Organic Light Emitting Diode ("OLED") displays (the "OLED Business Alliance MOU"; together with the Capital and Business Alliance Agreement and the LCD Business Alliance Basic Agreement, hereinafter collectively referred to as the "Alliance").

In addition, the Company also announces that it has resolved at the Board of Directors Meeting to raise funds by way of issuance of new shares (the "New Shares") through third-party allotment to the Expected Allottee (the "Third-party Allotment of New Shares"), issuance of the 2nd series bonds with stock acquisition rights (the "2nd Series Bonds with Stock Acquisition Rights;" of which, the portion of the bonds alone shall be hereinafter referred to as the "2nd Series Bonds;" and the portion of the stock acquisition rights alone shall be hereinafter referred to as the "2nd Series Stock Acquisition Rights") through third-party allotment to the Expected Allottee (the "Third-party Allotment of the 2nd Series Bonds with Stock Acquisition Rights") and issuance of the 3rd series bonds with stock acquisition rights (the "3rd Series Bonds with Stock Acquisition Rights;" of which, the portion of the bonds alone shall be hereinafter referred to as the "3rd Series Bonds;" and the portion of the stock acquisition rights alone shall be hereinafter referred to as the "3rd Series Stock Acquisition Rights") through third-party allotment to the Expected Allottee (the "Third-party Allotment of the 3rd Series Bonds with Stock Acquisition Rights;" together with the Third-party Allotment of New Shares and the Third-party Allotment of the 2nd Series Bonds with Stock Acquisition Rights, hereinafter collectively referred to as the "Third-party Allotment") pursuant to the Capital and Business Alliance Agreement (the "Financing") and to amend its Articles of Incorporation with respect to the total number of shares authorized to be issued in connection with the Financing. The Company further announces that there will be a change in the Company's parent company and its largest major shareholder as a result of the Third-party Allotment.

Please note that the Third-party Allotment is implemented on condition that all of the following conditionsprecedent (the "Conditions Precedent") are satisfied: (i) the relevant registration under the Financial Instruments and Exchange Act becomes effective; (ii) the permissions and approvals, etc. of the relevant authorities of each country that are required to implement the Third-party Allotment are obtained; (iii) the following proposals are approved at the Company's annual general meeting of shareholders scheduled to be held in June 2019 (the "General Meeting of Shareholders"): (a) a proposal on the Third-party Allotment and issuance of the Preferred Shares (as defined in "I. Overview of the Alliance, 1. Reason for the Alliance, (2) Reasons why the Company has determined that the Third-party Allotment is the best solution for the Company and its shareholders" below; the same shall apply hereinafter); (b) a proposal on partial amendment of the Articles of Incorporation to increase the total number of shares authorized to be issued and issue the Preferred Shares; and (c) a proposal to elect the Directors Designated by the Expected Allottee (as defined in "I. Overview of the Alliance, 1. Reason for the Alliance, (3) Management Structure after the Third-party Allotment" below). Regarding the permissions and approvals, etc. of the relevant authorities of each country that are required to implement the Third-party Allotment, the Company will disclose them immediately after they have been obtained.

• I. Overview of the Alliance

• 1. Reason for the Alliance

(1)Financial condition of the Company and the need for large-scale capital funds

The Company is mainly engaged in development, design, manufacturing and sale of small to medium sized displays and related products, and started its business in 2012 with the aim of starting up as a global leading company providing small to medium sized displays possessing both technological capabilities and production capacity pursuant to an agreement among the following four companies: Innovation Network Corporation of Japan (its current trade name is INCJ, Ltd.; "INCJ"), Sony Corporation, TOSHIBA CORPORATION and Hitachi, Ltd.

The Company has an advantage in the LTPS backplane technology that realizes displays with high resolution, low-power consumption and slim bezels. Supported by development and production of high-performance LCDs with this technology at its core, the Company's small to medium sized LCDs have been adopted by many customers, including manufacturers of smartphones, automotive devices and consumer equipment.

However, in the mobile device area, which is the main business of the Company and trades displays for smartphones and tablets, there has been an accelerated movement in recent years to replace displays for high-end smartphones with OLED displays, which make it possible to make displays thinner because they do not use any backlight. Although the Company has sought to establish OLED displays as one of its business areas by investing management resources in such area, it has fallen behind its competitors that have gone ahead in commercialization of OLED displays. Moreover, as the Company's major customers are willing to launch new smartphone models using OLED displays onto the market, the Company's sales to those customers could possibly decrease in the future. In addition, due to economic slowdown in China that has driven the growth of the smartphone market, the prolonged replacement by purchase cycleof smartphones and other factors, the growth of the smartphone market has stagnated globally and such weak growth is expected to continue in the future. Furthermore, Chinese competitive display manufacturers have intensified their offensive as a result of rapid technological catch-up, including OLED technology, as well as expansion of production capacity supported by the government. This has intensified price competition in the smartphone display market.

Due to such a rapid change in the business environment, the Company is expected to post consolidated net loss also for the fiscal year ending March 2019, which is likely to reduce net assets. If such a deterioration in business performance continues in the future, it is possible that net assets will be further reduced. In addition, the Company's cash flows are sharply worsening accompanying the poor business performance at the present. As in the case of profit, if the sluggishness of business performance like this continues, it can be expected that the Company's financial stability will weaken in the medium to long term.

Consequently, based on the premise that the Company would manage its business operations without any external capital assistance, the Company cannot deny the possibility that the Company's cash position (on a consolidated basis) could go below the level that is expected to be the minimum required cash position for the current working capital (including capital expenditures required for business) to maintain the Company's ability to remain a going business concern sometime after April 2019. Therefore, without a large-scale injection of capital funds, the Company cannot fundamentally resolve the deterioration of its financing and would have difficulty securing net assets for stable business continuity. If the business environment does not improve significantly in the future, not only may it cause the Company to have difficulties in maintaining its ability to remain a going business concern, but also its share value may be significantly impaired by having insufficient capital.

The Company has implemented management improvement measures, such as a revision to the business portfolio, a structural reform in the mobile device area and a shift of resources to the automotive and non-mobile device areas, which are growing business areas, and the Company is required to further accelerate these moves in the future. Nonetheless, the Company has concluded that unless its financing is improved drastically through an investment of large-scale capital funds, it is difficult to solve this critical situation. Based on the above, the Company has reached a conclusion: The best option from the perspective of the Company's stable business continuity and future growth strategy is the following: (i) The Company will select new sponsors who can offer to the Company support including the provision of capital funds. (ii) With the assistance from such sponsors, the Company will address its issues in a drastic manner. (iii) On the financial side, the Company will promptly realize (a) securing working capital for current and future business, (b) returning its cash flows to normal, (c) acquiring funds for investment in future growth, and (d) securing net assets to continue business stably, in particular. (iv) On the business side, the Company will promptly realize (a) improving business by combining global supply-chain management functions and broad customer base, (b) commercializing evaporation OLED (Note) displays, and (c) improving the cost structure, among other measures.

Note: Evaporation OLED display is a type of display produced by the method of evaporating the organicsubstance that emits light when current is applied and depositing it on the substrate surface. It offers superior freedom of design capabilities (such as being bendable) compared to LCDs and is being adopted for use in high-priced smartphones.

In addition, as announced in the Company's press release dated May 15, 2018, titled "Japan Display Announces the Recording of Business Restructuring and Non-Operating (Foreign Exchange, Equity-Method Losses, Depreciation) Expenses and Restructuring Actions (Workforce Reductions etc.)", the Company has streamlined its business operations through a series of fundamental restructuring measures in order to improve earnings. However, as stated above, the Company's business performance has not yet improved and cash flows have deteriorated, which are considered to require further improvement. Therefore, the Company is formulating a new plan of restructuring toward improving cash flows by reducing fixed cost. Regarding the details of the new plan of restructuring, the Company will disclose them immediately after the Company has decided it.

(2)

Reasons why the Company has determined that the Third-party Allotment is the best solution for the Company and its shareholders

In the small to medium sized display area in which the Company engages, the business environment has been changing or deteriorating rapidly due to the replacement of LCDs with OLED displays for high-end smart phones, global growth slowdown in the smartphone market, intensified price competition with the rise of competitors in China, and other factors. In addition, as described in "(1) Financial condition of the Company and the need for a large-scale capital funds" above, as a result of a drastic change in the business environment, etc., the Company's cash flow and profitability have deteriorated sharply. If the business environment does not improve significantly in the future, not only may it cause the Company to have difficulties in maintaining its ability to remain a going business concern, but also its share value may be significantly impaired by having insufficient capital. Based on the above, from the perspective of the Company's stable business continuity and future growth strategies, the Company has concluded that it is the best option to select new sponsors who can offer to the Company support including the provision of capital funds, thereby promptly and radically addressing its financial and business issues with assistance from such sponsors.

In the process of selecting sponsors, the Company adopted a bidding procedure from the viewpoint of obtaining the best conditions for its business continuity and, eventually, maximizing the share value of its shareholders. The Company contacted a number of business investors and financial investors in Japan and overseas in addition to the Suwa Consortium (Note), and discussed the possibility of support for the Company. As a result, from the viewpoint of both financial and business support to the Company, the Company has determined that it is the best option to appoint Suwa Consortium as a sponsor to improve its corporate value and for the benefit of its shareholders as well in light of the Company's present situation.

(Note) Suwa Consortium is a group of companies that was formed to take part in the Company's strategicpartner selection process by TPK, a major touch-panel company listed on the Taiwan Stock Exchange (Location: No.13-18, Sec. 6, Minquan E. Rd., Neihu Dist., Taipei City, Taiwan Representative: Michael Chao-Juei Chiang (Chairman)); Harvest Tech (Location: 53F, Shanghai Two ifc, 8 Century Avenue, Pudong New Area, Shanghai, China Representative: Henry Zhao, PhD (Chairman)), an investment company that provides private equity management and is a member of Harvest Group, which is headquartered in Beijing and one of the largest asset management company groups in China; and Cosgrove Global Limited (Location: 14F No 237 Sec 1 Chien-kuo S Rd Taipei City Taiwan Representative: Tsai Ming Chung (Director)), which is an investment company operated and managed by a family office of the Tsai family based in Taiwan, the founding family of Fubon Financial Holding Co., Ltd., a major financial holding company in Taiwan ("CGL"). Moreover, the Expected Allottee is a company that the Suwa Consortium established for the Third-party Allotment. In order to complete the establishment of the Suwa Consortium by the time the Capital and Business Alliance Agreement is executed, the Expected Allottee was established with China Silkroad Investment Capital Ltd. (of which Winston Henry Lee is the representative) as its only shareholder. However, based on agreement within Suwa Consortium, TPK, a fund formed by Harvest Tech ("Harvest Fund") (the details of which are undecided), CGL, and Topnotch Corporate Limited (Location: 14F No 237 Sec 1 Chien-Kuo S Rd Taipei City Taiwan Representative: Tsai Ming Chung (Director)), which is an investment company operated and managed by a family office of the Tsai family based in Taiwan as well as CGL (together with CGL, "CGL Group") will make investments and become investors of the Expected Allottee prior to the implementation of the Third-party Allotment. The Company will disclose the details immediately after they have been decided. Although China Silkroad Investment Capital Ltd. is in charge of establishing and operating the Expected Allottee, he is not scheduled to be an investor of the Expected Allottee at the time of implementing the Third-party Allotment.

As stated above, on January 12, 2019, the Company positioned the Suwa Consortium as a leading and priority candidate in the sponsor selection process. The terms and conditions presented by the Suwa Consortium, however, are premised on the assumption that not only will the Third-party Allotment result in a large-scale dilution of the Company's existing shares, but also shares will be issued on favorable terms, which will seriously affect the Company's shareholders, thus, the Company carefully examined them. With regard to the terms and conditions of the Third-party Allotment, the Company discussed and negotiated with the Suwa Consortium in an attempt to increase the amount paid in per share in order to maximize the shareholders' interests. Specifically, the price of JPY 50 per share is a significant discount from the latest Company's market share price and falls under the favorable issuance, as it is particularly advantageous to the Expected Allottee, and if the Third-party Allotment falls under the favorable issuance, it will have a large impact on the Company's existing shareholders. Therefore, the Company had repeatedly negotiated with the Suwa Consortium to set the issue price within a range that does not fall in