Hitachi and Matsushita Electric have reached a basic agreement to jointly produce liquid crystal display (LCD) panels and Hitachi has invited Toshiba to also participate, according to newspaper reports.
The two companies plan to share the $US899 million cost of a new LCD plant planned by Hitachi to be built as early as 2006, said the newspaper.
The factory would make large scale panels for televisions, the Nihon Keizai Shimbun newspaper reported.
Hitachi and Matsushita both said nothing has been decided as of yet, when asked to comment on the newspaper report. Toshiba declined to comment.
Such tie-ups have become more common in the display industry in recent years as companies look to share their expertise to speed development of new technology and share the increasingly high cost of advanced production lines.
Earlier this year ground was broken on a new LCD plant that is being built under a new joint venture formed by Samsung Electronics and Sony.
The plant in South Korea will act as a main production base for LCD panels for both companies when complete and commercial production is scheduled to begin in the first half of 2005.
The three companies mentioned in the newspaper report already have joint ventures in other areas of their display businesses.
Matsushita and Toshiba jointly manufacture small and medium-size display panels through their Toshiba Matsushita Display Technology joint venture and Hitachi works with Fujitsu in the area of plasma display panel (PDP) production through Fujitsu Hitachi Display.
Behind the need for more advanced technologies and panels is a fast increasing demand for a wide range of devices using LCDs, such as televisions, computer monitors and cellular telephones.
In Japan shipments of LCD televisions were just over 1 million units for the first six months of the year, an increase of 65.7 per cent on the previous year, according to figures from the Japan Electronics and Information Technology Association (JEITA).
Last month Samsung said it expected worldwide demand for cellular telephones to be stronger than expected this year at 600 million units.