Tokyo - Sony Corp, which is the 2nd largest maker of consumer appliances in the world, said that it would acquire a 1/3rd stake in Sharp’s LCD panel plant expected to be complete by March 2010. This is an effort by Sony to cope with increasing demand for flat televisions.

This is the latest move in the list of alliances made by Japanese flat TV manufacturers in order to secure enough LCD panels while having initial investments under control to cope with greater price declines.

In addition to LCD panels, the joint venture will also manufacture LCD modules. LCD modules are display panels furnished with components like LCD driver chips and backlight unit.

The move decrease Sony’s dependence on chief supplier Samsung Electronics Co. of South Korea as LCD TV sales are expected to increase by 29 % this year. Lehman Brothers Holdings Inc and UBS AG forecast the shortage of LCD TV will continue in 2008.
” This will be a positive step for Sharp as it means a big buyer, which would keep the new factory engaged,” said Kazuharu Miura, analyst at Daiwa Institute of Research.

Sharp’s new LCD panel plant will use 10th generation glass substrates. These substrates can yield more panels than those of the previous generation. This will increase the efficiency of the two companies and they will be able to offer their LCD TV’s for more attractive prices.

Park Hyun, an analyst at Prudential Investment and Securities said, “Sony required an additional source of panels as the LCD TV market is growing faster than expected. As Sony increases TV production, it is quite normal to look for diverse panel sources”.

“Probably Sony will continue the tie up with Samsung. Hence Sony’s diversification plans will not affect the alliance with Samsung in a negative way,” he added.

Sony will own 34 % of the venture that will control the Sharp, being built by sharp in Sakai City, Osaka while sharp will own the remaining 66 % - the companies announced today.

Sony and Sharp are the second and the third largest LCD TV manufacturers in the world, with only South Korea’s Samsung Electronics ahead of them.

In 2004, Samsung and Sony set up S-LCD Corp., a panel-manufacturing venture which has invested about $4.1 billion in two plants to manufacture screens of 40 inches to 52 inches size.

“If costs and demand-supply conditions are appropriate Sony will think of constructing a 10th generation plant with Samsung,” said Ryoji Chubachi, Sony president.

This article is the property of http://www.ElegantDirectory.com
Copying and publishing any article from our site is strictly NOT allowed