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.