(Yicai Global) June 17 -- Chinese touch screen maker TPK Holding has walked back its plan to acquire Japan Display for over USD550 million as the latter's financial distress intensifies. 

TPK has decided to withdraw its investment plan "due to several changes of conditions," the Taipei-based firm said in a statement today, adding that the decision will not harm its financial performance.

TPK said in April that it was planning to invest in JDI with Fubon Financial Holding and Harvest Fund Management and close the deal this year. The three companies would have formed a joint venture to buy nearly 50 percent of JDI's equity for JPY60 billion (USD546 million).

JDI has been making losses for five straight years. Its net loss was JPY109.4 billion last year, according to its earnings report. The Tokyo-based firm announced it will lay off employees and cut salaries in order to pare costs amid a large amount of debt.

"JDI is a bottomless pit that TPK cannot fill," Chen Hui, deputy general manager of market research firm AVC Revo, told Yicai Global. JDI's future is bleak because it did not seize the opportunity to invest in organic light-emitting diode technologies, which are booming on the market, and instead it held onto its liquid crystal display business, Chen added. 

Editor: Liao Shumin, Emmi Laine