Sanyo Electric Co. Ltd. said on Wednesday it will quit liquid crystal displays (LCD) after it failed to meet earnings targets amid intense price slumps, according to a report from Reuters.
Sanyo will sell its 45 percent stake in a money-losing joint venture to partner Seiko Epson Corp., which aims to quickly turn around the world's third-largest maker of small- and medium-sized LCDs used in cellphones and digital cameras.
The sale will leave Sanyo, which has already withdrawn from the organic light-emitting diode business and makes no cathode ray tubes or plasma panels, with no display operations.
The firms did not provide financial details of the transaction.
Some analysts said the loss-making status of the venture makes it difficult to estimate the size of the transaction, but terms of the deal could be quite unfavourable to Sanyo.
The venture held a 10 percent share in the global market for small- and medium-sized LCD panels in April-June, trailing Sharp Corp. and another venture between Toshiba Corp. and Panasonic maker Matsushita Electric Industrial Co. Ltd., according to research firm DisplaySearch. ¬†
According to Reuters, the agreement will lighten the burden for Sanyo, the consumer electronics giant that received a 300 billion yen (approx. U.S. $2.57 billion) bailout from banks and is in the middle of a company-wide restructuring, while allow Seiko Epson to focus on reviving its struggling display business.
In the year to March 2007, Seiko Epson expects sales at its display business to drop 22 percent from a year earlier to 288 billion yen (approx. $2.5 billion), with the venture accounting for 85 percent of the revenue.
to Daily News