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Organic light-emitting diode display company Joled Inc. has filed for court protection with debt totaling 33.7 billion yen.
The company will pull out of the display manufacturing business and close its factories in Ishikawa and Chiba prefectures.
It will also lay off about 280 who are not involved in the development of its roughly 380 employees.
Joled Inc. was set up in 2015 by Panasonic, Sony, INCJ, and Japan Display while merging the OLED operations of Panasonic and Sony.
It was meant to compete with South Korean and Chinese makers with thinner, energy-saving OLEDs.
But it had to face weakened demand for OLEDs and increased competition while suffering delays and spending more than expected to realize stable production.
A vast amount of funding from state-backed fund INCJ Ltd. amounting to about 140 billion yen did not save Joled from its downfall.
INCJ is the top shareholder of Joled with a 56.8 percent stake. Among other major shareholders, car parts manufacturer Denso Corp owns 16.1 percent of the company.
Japan Display Inc., a former shareholder of the company and a maker of liquid crystal displays, will take over its technological development business.
