Sony, Samsung in Talks to Co-Develop LCD Panels Aug 26, 2005

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Japan's Sony Corp. said it was in talks with Samsung Electronics Co. Ltd. to extend their liquid crystal display (LCD) partnership to the development of the panels themselves. Sony and South Korea's Samsung formed a U.S. $2 billion joint venture in 2004 to mass-produce LCD panels. The venture, called S-LCD, began shipments of panels this April.

Sony currently procures panels from S-LCD that were basically developed by Samsung. Sony then adds its own semiconductors, backlights and other key components to assemble LCD TVs.

A Sony spokeswoman said the two firms have been in talks to co-develop the panels but the timing of such a move had not been decided. The Nihon Keizai newspaper quoted a Samsung official as saying that it could happen as early as this year.

"When we started the joint venture, both sides sent engineers, so it is natural that these talks have been occurring," the Sony spokeswoman said.

The Nihon Keizai quoted Sony executive deputy president Katsumi Ihara as saying joint development with Samsung would allow it to procure high-quality panels at a cost that would allow it to be more competitive.

Sony's TV division posted a quarterly operating loss of 39 billion yen (approx. U.S. $356 million) in the April to June quarter, hit by sliding prices of LCD TVs and slumping demand for traditional tube models.

Sony is due to unveil a new restructuring plan next month that is expected to include further steps to shore up its TV operations, which are far less efficient than rivals Sharp Corp. and Matsushita Electric Industrial Co. (Reuters)

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