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Sony, Samsung in discussion on LCD joint venture

Sony, Samsung in discussion on LCD joint venture

Sony, Japan’s number two consumer electronics company, and Samsung Electronics, one of the world’s largest makers of liquid crystal display (LCD) panels, are getting serious about a tie-up in the flat panel display business.

The two companies are in talks on just such an issue. Previously, Sony had said that Samsung was one of several companies with which it was exploring the possibility of a joint venture.

Sony announced earlier this year that it wanted to make an investment in LCD panel production rather than just outsource its production needs to other companies.

Confirmation of the talks, which had been the subject of speculation in Tokyo and Seoul for several weeks, came after a report in the Nihon Keizai Shimbun business newspaper said the two companies had already reached a deal.

“We are in negotiations with Samsung but nothing is final yet,” a Sony spokesman, Gerald Cavanagh, said.

An almost identical comment was made by Samsung.

“We have been talking on positive terms but nothing has been decided,” a Samsung spokesman, Yim Jun, said.

Yim said “an announcement” could be expected within weeks but didn’t elaborate on what the announcement might be.

The Nihon Keizai report said basic agreement had been reached by the two companies to establish a joint venture to build an LCD plant. The plant would contain a so-called “seventh generation” production line, which was one that used glass sheets 1.9m x 2.2m. This was larger than current sixth-generation and older lines could handle, and allowed for larger panels to be made and for production costs to be reduced.

The joint venture would be initially capitalised at $US171 million and construction was expected to begin within the year at Asan, in South Korea, the report said.

The company would draw its chief executive officer from Samsung, the newspaper reported.


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