Sharp and Toshiba announced today that the two companies have agreed to collaborate closely in LCDs, a move that is expected to enhance the companies' corporate value, profitability and global competitiveness.

The alliance will allow each company to make effective use of its respective strengths and resources, particularly Sharp's capabilities in LCDs and Toshiba's expertise in advanced semiconductors.

Sharp and Toshiba will initiate the collaborative partnership in fiscal year 2008, starting with an expansion of reciprocal procurement - Sharp's procurement of system LSIs for LCDs from Toshiba, and Toshiba's procurement of Sharp's LCD modules for TVs of 32 inches and larger. Through the program, Sharp aims to satisfy about 50 percent of its total demand for system LSIs for TVs in fiscal year 2010, while Toshiba targets meeting 40 percent of its demand for LCD modules in the same year.

Toshiba said it will procure panels from a 380 billion yen ($3.4 billion) factory being built by Sharp in Osaka Prefecture, western Japan, while Sharp will procure semiconductors from Toshiba for use in its LCD TVs.

The global market for LCD TVs is growing at a brisk pace, a trend expected to continue in coming years. While various types of displays are being brought to market, Sharp is channeling its resources into developing LCD TVs characterized by thin lines, light weight, high resolution images and a long lifetime, and into achieving progressive advances in reducing power consumption.

System LSIs for TVs are increasingly required to support advanced functions and higher levels of performance alongside their core role of image processing. As TVs shift to higher levels of resolution, Toshiba?s system LSIs for TVs deliver the company's expertise and achievements in image processing in products that meet the requirements of major TV set manufacturers.

By bringing together their key technologies, Sharp and Toshiba will promote business advances through development of differentiated products.

During the Q&A session in the press conference held in Japan today, Toshiba's president Atssatoshi Nishida was asked about the company's plans to produce OLED TVs. Toshiba's strong man said a technical problem in the production of the next-generation TVs has forced the company to plan mass production in 2009. For now, Toshiba will focus in the production of LCD displays.