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Thursday, August 25, 2005
Sony to Expand Samsung Link to Cut LCD Costs

Sony plans to expand its LCD partnership with Samsung to include joint work on improving quality and cutting production costs.

Sony and South Korea's Samsung formed a $2 billion joint venture in 2004 to mass-produce LCD panels. The venture, called S-LCD, began shipments of panels this April.

Sony currently procures panels from S-LCD that were based on technology developed by Samsung. Sony then adds its own semiconductors, backlights and other key components to assemble LCD TVs.

A Sony spokeswoman said its engineers would start to play a larger role in the relationship, offering ideas on how to produce a higher quality panel at a lower cost. But the basic panel technology would continue to come from Samsung.

"We will be working together to improve panel quality and cut manufacturing costs," said the spokeswoman, Mina Naito. "But we are not talking about conducting joint research and development of the panels."

The two companies would start working together on panel research and development as early as this year.

Sony's TV division posted a quarterly operating loss of 39 billion yen in the April-June quarter, hit by sliding prices of LCD TVs and slumping demand for traditional cathode ray tube (CRT) models.

Sony is due to unveil a new restructuring plan next month that is expected to include further steps to shore up its TV operations, which are far less efficient than rivals Sharp Corp. and Matsushita Electric Industrial Co. .

Aiming to boost its TV sales, Sony also said it would introduce a new brand for its LCD TV sets called "Bravia" from this autumn. That would replace the "Wega" brand, which will continue to be used to sell its traditional cathode ray TVs.

On the other hand, Samsung Electronics chalked up record revenue from liquid crystal display (LCD) sales in July.Accoridng to DisplaySearch, Samsung's revenue from LCD sales rose 9.3 percent from the previous month to $916 million. Samsung is the first LCD maker to break the $900-million mark in monthly revenue.

For the month, Samsung sold 8.42 million LCD units, up 5.3 percent from a month earlier.

The record sales came after Samsung began producing bigger and more profitable LCDs, measuring 40 inches and 46 inches diagonally, at its new seventh-generation plant, DisplaySearch said.

Rival LG.Philips LCD came second with monthly revenue of $860 million in July, up 5.3 percent from a month earlier. LG.Philips LCD maintained its lead over Samsung in the large-sized segment of 10-inch and bigger panels in July.

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