Samsung Electronics has fully incorporated S-LCD, its
joint venture with Sony established in 2004, as one of
its fully-owned subsidiaries.
Sony sold its nearly 50 percent stake in S-LCD joint
venture, as it struggles to reduce huge losses at its
TV business. Samsung announced on January 25 that it
had acquired 100% of Sony?s shares in it on January
19.
Samsung had agreed to end its joint liquid crystal
display (LCD) display venture with Sony as the global
panel industry continues to struggle with a prolonged
downturn in TV demand.
The move comes as Sony is aiming at switching to
cheaper outsourcing for flat screens for its TVs while
Samsung pushes ahead with next-generation displays.
Sony's TV operations continued to suffer quarterly
operating losses, hit by a slump in LCD TV demand.
Samsung, the world's largest LCD panel maker, merged
its LCD unit with its semiconductor division earlier
this year, in a bid to help facilitate a faster
turnaround.
For Sony, this transaction will enable it to monetize
its shares in S-LCD and aims to secure a flexible and
steady supply of LCD panels from Samsung, based on
market prices and without the responsibility and costs
of operating a manufacturing facility. With whole
ownership of S-LCD, Samsung anticipates heightened
flexibility, speed and efficiency in both panel
production and business operations.
Established in April 2004, S-LCD has continued to
deliver cost-competitive LCD panels to both of its
parent companies, contributing to the expansion of the
respective parties' TV businesses, and the large-sized
LCD TV market overall. However, LCD panel and TV
market conditions have changed. In order to respond to
such challenging conditions and to strengthen their
respective market competitiveness, the two companies
have agreed to shift to a new LCD panel business
alliance.