Sony and Sharp, the world's second- and third-largest liquid crystal display TV makers, announced today they would set up a joint venture to make and sell large LCD panels and modules.
The two companies will negotiate to enter into legally binding joint venture documentation by September 30, 2008.
The parties will aim through this collaboration to further strengthen Sharp's advanced LCD display technologies and Sony's competitiveness in the TV market.
Once the joint venture agreement is entered into and becomes effective, and subject to receipt of necessary government approvals, the new joint venture will seek to maximize the advantages gained from using the world's first 10th generation glass substrates to produce large sized LCD panels and modules, which are display panels equipped with components such as a backlight unit and LCD driver chips. These will then be supplied to Sharp and Sony in quantities corresponding to their respective investments. Sharp and Sony will also discuss and study the possibility to jointly develop components for LCD modules.
Sharp plans to turn its new 380 billion yen ($3.52 billion) LCD plant, which is being built in western Japan, into a joint venture with Sony. Sharp's new factory would use so-called 10th-generation glass substrates, which can yield more panels than earlier-generation, smaller glass substrates, improving production efficiency.
"The new company will endeavor to rapidly establish full and stable manufacturing operations at a new facility producing large sized LCD panels, and, in coordination with other companies concerned, will realize the vision of 'Manufacturing Complex for the 21st Century'," the companies said in a statement.
The new company will be located at
Sakaihama District, Sakai-ku, Sakai City, Osaka Prefecture. Operations are schedulled to start by the end of FY 2009. The company plans to deliver 72,000 substrates per month (initially 36,000 substrates panels/month). Sharp plans to hold a 66 percent stake in the venture, with Sony taking the remainder.
Sony currently runs an LCD panel joint venture with Samsung Electronics, but procurement from Sharp is expected to help it secure enough panels to meet fast-growing LCD TV demand without heavy capital investments.
Samsung LCD said today that the new joint venture does not affect the Samsung-Sony LCD partnership. Both Sharp and Samsung make flat TVs under their own brands, and Sony, Sharp and Samsung are competing for their piece of the global flat-TV pie.
Some recent surveys have shown Tokyo-based Sony momentarily leading in LCD TV sales, but Samsung is now believed to be No. 1. Sharp, which is struggling to gain overseas brand recognition, still trails Samsung and Sony. Sharp's Aquos brand of LCD TVs is extremely popular in Japan.
In December, Toshiba said it will team up with Sharp
to buy LCD panels for Toshiba flat-panel TVs.
At that time, Toshiba said it will drop panel-making from its business, selling its stake in a joint venture panel maker, led by Matsushita Electric Industrial Co., which makes Panasonic brand products.
Matsushita, the world's leading maker of plasma TVs, has been strengthening in-house production of panels, including LCD displays, counting on solid flat-panel TV sales in coming months. Matsushita is also supplying Japanese electronics maker Hitachi Ltd. with LCD panels.