TOKYO (Reuters) - Japan's Sharp Corp 6753.T will ask the government to help it form an alliance with rival Japan Display Inc 6740.T in OLED technology to better compete with South Korean makers, its chief executive said on Thursday.

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“We should create a Japan alliance” in organic light-emitting diode (OLED) panels, Tai Jeng-wu told reporters at the Tokyo Stock Exchange (TSE), after Sharp’s shares returned to the bourse’s first section after a year’s absence.

OLED screens are gaining in popularity as they are generally thinner, more flexible and offer richer colors than liquid crystal display (LCD) panels. Apple Inc AAPL.O has adopted OLED screens for its new iPhone X.

Sharp and Japan Display, both Apple suppliers, plan to start OLED panel production next year or later. South Korea's Samsung Electronics Co Ltd 005930.KS already supplies OLED panels to global smartphone vendors while LG Display Co Ltd 034220.KS does likewise for television set makers.

“Do we want (OLED) technology in Japan or not? I’d like to speak with the industry ministry and INCJ (the Innovation Network Corp of Japan) on the matter,” Tai said.

State-backed INCJ owns 36 percent of Japan Display, which was formed by combining the ailing display units of Sony Corp 6758.T, Hitachi Ltd 6501.T and Toshiba Corp 6502.T.

Tai also said he would contact the government for potential investment in JOLED, a Japan Display affiliate, which sold its inaugural batch of OLED screens to Sony on Tuesday.

JOLED, which boasts a low-cost printing process for OLED panels, is seeking to raise 100 billion yen ($888 million) in investment from materials, equipment and electronics makers to expand production capacity.

Japan Display and INCJ declined to comment. JOLED declined to provide immediate comment.

Tai, former vice chairman of Taiwan's Hon Hai Precision Industry Co Ltd (Foxconn) 2317.TW, became head of Sharp last year after Foxconn took control of a Japanese firm hit by price competition and falling sales in LCD panels.

Tai has said he would step down once Sharp turns profitable at the net level and its shares return to the TSE’s first section.

Sharp forecasts net profit of 69 billion yen for the year through March, which would be its first annual profit in four years following cost-cutting under Foxconn.

Its shares returned to the TSE’s first section on Thursday for the first time since August last year, when they fell to the second section after Sharp booked negative net assets.

When asked about his future, Tai on Thursday said he wants Sharp’s board to select a co-chief executive next year to whom he could transfer some of his responsibilities.

($1 = 112.0200 yen)