Japan Display has been losing money for the past six years on an annual basis due to its late shift to OLED screens.
The Japanese company has repeatedly struggled to come up with a restructuring plan.
Japan Display is still an important supplier to Apple for OLED panels in Apple Watch and LCD for iPhone XR.
Apple's iPhones will also likely feature triple-lens rear camera arrangements come 2020.
The supply deal from Apple will mark Japan Display’s foray into the OLED display market.
The move is likely to add to the gloom surrounding Apple and its suppliers for the iPhone.
This will produce OLED screens 20 percent to 30 percent cheaper than the current evaporation process.
Apple's plans to go ahead with OLED displays in upcoming iPhones results in a drop in Japan Display share value
Apple recently started planning new iPhone models and decided all three models would have organic light-emitting diode panels
The sensor by Japan Display is a glass-based fingerprint sensor which makes use of its multi-touch technology, designed initially for other LCD displays.
Technology giant Apple is reportedly not planning to produce a large volume of the iPhone SE that it released last month to offset the slump of its flagship series, a report said.
Japan Display Inc Chief Executive Mitsuru Homma on Thursday said the screen maker's "biggest client", widely understood to refer to Apple Inc, is increasing orders ahead of the expected launch of a new iPhone this month.
Japan Display Inc said on Friday that it would build a new $1.4 billion liquid crystal display (LCD) manufacturing plant, which a source said would supply smartphone screens for Apple Inc.
Japan Display is considering building a new plant to supply smartphone screens for Apple, which may shoulder much of the 200 billion yen ($1.68 billion) investment, Japan's Nikkan Kogyo newspaper said.
Japan Display, the world's largest maker of displays for smartphones and tablets, has applied for a share listing in Tokyo...
2013 will not only be about improvements in processors; handsets will be a lot larger and the future crop of high-end models will feature 5-inch displays.