SONY SHARP teamed up to build LCD joint venture

Sharp Co (Sharp Corp) and Sony Corp (Sony Corp. aka: Sony) will set up a joint venture, in a new SHARP factory in the production of LCD TV display (LCD) panel. This is also the two companies in the increasingly competitive situation to consolidate their market position of the latest initiatives. According to the agreement reached between the two sides, SHARP and SONY will jointly own SHARP is currently in the western part of Japan to build a LCD production facility. SHARP holds a 66% stake in the joint venture, the remaining shares held by SONY. The two companies did not disclose the amount of investment in SONY on Tuesday's announcement. But SHARP had previously said that the total size of the LCD plant is about $3 billion 500 million, according to this calculation, SONY shares worth about $1 billion. The plant is expected to be put into operation by March 2010. It will be used for the production of more than 40 inches (including a 40 inch) TV panel LCD. Global sales of LCD TVs are expected to grow strongly over the next few years as consumers continue to move away from old models to HD models. According to research firm DisplaySearch data, LCD TV industry sales will grow by 47% in 2011 to about $96 billion last year, $65 billion 200 million. But competition in the industry has become more intense. Vizio Inc. and other competitors to join the United States is undoubtedly adding fuel to the flames, Vizio launched a contract manufacturer by the Asian low-cost TV, the current price level brings great pressure. At the same time, LCD panel manufacturers are rapidly expanding their production as a result of strong demand growth, which could lead to oversupply. SHARP's new plant has an annual capacity of 13 million sets of 42 inch TV, the annual production capacity of other old factories for the 20 million sets of 32 inch tv. Panasonic ELectric (Matsushita) recently said it plans to invest $2 billion 800 million to build an annual capacity of 15 million sets of 32 inch LCD TV panel plant is expected to be put into operation in 2010. Since SONY does not have its own panel production plant, so the deal can make it at a discount price to get high quality large screen TV panels. SONY and Samsung Co. (Samsung Electronics) also set up a similar joint venture, but with the rising sales, SONY's demand for the panel is also growing. SONY is a latecomer to the LCD TV market, but according to DisplaySearch data, it is still in the fourth quarter of last year, with the highest sales revenue to sit on the top of the global TV market. For SHARP, any cooperation will help to reduce the huge financial burden brought about by investment in new plants, but also access to a stable panel buyers. SHARP has been looking for buyers for its panels, after the completion of the new plant, its output will be greater than their own needs. Toshiba (Toshiba Corp.) and Pioneer Co (Pioneer Corp.) has agreed to buy SHARP produced TV panel.

Source: Wall Street Journal