Toshiba Corporation and Samsung Electronics Co., Ltd. today signed a memorandum of terms covering integration of their respective optical-disk-drive businesses in a joint venture.
The new joint venture will bring together product and business planning, product development, procurement and sales for optical-disk drives (ODD), including CD-ROM and DVD-ROM drives. The new company will be 51% owned by Toshiba and 49% owned by Samsung Electronics and consolidated by Toshiba. The JV will be headquartered in Japan, while its wholly owned subsidiary established in Korea will control operations there.
The scale of the combined operation will position the joint venture among the world leaders in the ODD business. With 2002 annual sales exceeding 200-billion yen, the collaboration is expected to further enhance its global position.
The optical-disk-drive business faces fast changing customer requirements for faster, slimmer drives, and a rapid transition in the main product to recordable DVD drives. Price erosion and alliances are also making themselves felt and further intensifying competition. In this environment, advantages in technology, product development and price competitiveness are all crucial for survival.
The new joint venture will construct a competitive business structure that can promote optimized use of management resources and leadership in the global market.