The company did not name Apple, in line with its policy of not identifying clients. A person familiar with the matter said Apple would also invest an unspecified amount in the plant, which would further the Japanese screen maker's aim of becoming the primary supplier of high-tech screens for iPhones.
The source declined to be named as the investment details remained confidential. The total cost of the plant in Ishikawa, central Japan, is estimated at 170 billion yen, Japan Display said in its statement.
Global iPhone sales, notably in China, have surged to make Apple the most profitable company in history.
Japan Display said it aims to start operations at the plant in 2016 and expects the move to increase its LCD capacity by 20 percent.
But it recently reported a rebound to profit, boosted by demand from Apple and Chinese smartphone makers, in stark contrast with Japanese competitor Sharp Corp's shrinking panel business.
© Thomson Reuters 2015