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Appeared on: Sunday, October 30, 2011
Sony Considers Pulling Out Of LCD JV With Samsung

Sony is reportedly considering dissolving its LCD joint venture with Samsung Electronics in a bid to cut costs, Nikkei business daily said on Sunday.

The paper said Sony was aiming to reach an agreement by the end of this year to sell its nearly 50 percent stake in LCD joint venture S-LCD to Samsung.

"Sony has made no announcement in this regard and has no comment," Sony said in a statement today.

Samsung and Sony joined hands in 2004 to set up an LCD panel making joint venture called S-LCD Corp. The joint venture makes panels measuring between 40 and 50 inches.

Sony's move could cut procurement costs as the company heads for its eighth straight annual loss in its TV business. A global oversupply of LCD displays has lead to rapidly declining prices of LCD panels.

In April, the two companies cut capital in the joint venture by $555 million as Sony sought to slash its TV losses and Samsung pushed ahead with next generation displays.

Sony has already sold off TV factories in Spain, Slovakia and Mexico in the past few years and outsources more than half of production to companies including Hon Hai Precision Industry. The company is running four TV plants of its own in Japan, Brazil, China and Malaysia.

Large-size LCD panel makers based in Taiwan such as AU Optronics (AUO) and Chimei Innolux (CMI) would benefit the most if Sony gave up its stake in S-LCD. In addition, LG Display, the world?s No. 2 manufacturer of flat screens, may be looking to offer more LCD displays to Sony.


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