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Sony tying up with Sharp in TV displays

Sony tying up with Sharp in TV displays

Falling behind rivals in flat-panel development for TVs, Sony is tying up with Japanese rival Sharp in procuring liquid crystal displays, a company official said Tuesday.
Japan's business daily The Nikkei reported in its Tuesday editions that Sony Corp. plans to invest 100 billion yen (US$926 million; euro625 million) in a plant Sharp Corp. is building to make panels for flat TVs.
A Sony official, speaking on customary condition of anonymity, said a news conference will be held later in the day in Tokyo to give details, but would not elaborate.
Sharp spokeswoman Miyuki Nakayama declined comment.
Sony's cash investment would be a plus for Sharp's 380 billion yen (US$3.5 billion; euro2.4 billion) new plant for making panels for larger 40-inch, 50-inch and 60-inch flat TVs.
Construction began in December, and the plant is expected to be running by March 2010.
Demand for slimmer and bigger TVs is growing around the world. Although the televisions use various panel technologies, LCD is the leading technology so far along with plasma display panels.
Sony does not make its own LCD or plasma display panels. It has been buying LCD panels from a joint venture it has with Samsung Electronics Co. of South Korea.
But Sony can hope to ensure panel supply through its partnership with Sharp.
Both Sony and Sharp stock rose more than 1 percent in morning trading on the news.
Analysts said the move was positive for both companies, as it would give Sony more of an option in buying panels, while Sharp can hope to reduce the investment burden for panel production.
Both Sharp and Samsung make flat TVs under their own brands, and Sony, Sharp and Samsung are competing for their piece of the global flat-TV pie.
Some surveys have shown Sony momentarily leading in LCD TV sales, but Samsung is now believed to be No. 1.
Osaka-based Sharp, which is struggling to gain overseas brand recognition, still trails Samsung and Sony. Sharp's Aquos brand of LCD TVs is extremely popular in Japan.
Sony management failed to recognize how quickly slimmer TVs would take off, partly because of the huge success it had enjoyed in developing and selling high-quality old-style televisions.
Its failure in flat TVs was a major reason for its faltering earnings several years ago. Sony has staged a comeback recently under the leadership of Howard Stringer, a Welsh-born American who became chief executive in 2005.
In December, Toshiba Corp. said it will team up with Sharp to buy LCD panels for Toshiba flat-panel TVs.
At that time, Toshiba said it will drop panel-making from its business, selling its stake in a joint venture panel maker, led by Matsushita Electric Industrial Co., which makes Panasonic brand products.
Matsushita, the world's leading maker of plasma TVs, has been strengthening in-house production of panels, including LCD displays, counting on solid flat-panel TV sales in coming months.
Matsushita is also supplying Japanese electronics maker Hitachi Ltd. with LCD panels.
On Monday, Standard and Poor's Ratings Services raised its outlook on Sony to "stable" from "negative," citing improved profits at its core electronics unit and gradual recovery in its struggling PlayStation 3 video game operations.


Updated : 2021-04-19 10:01 GMT+08:00