LONDON – Japan's Hitachi Ltd. wants to combine its manufacturing operation for small and mid-size liquid crystal display panels, with those of Toshiba Corp. and Sony Corp., according to reports. Such panels are used for smart phones and tablet computers amongst other applications.
Sony and Toshiba were already in talks with Innovation Network Corp of Japan (INCJ), a predominantly state-owned investment fund to merge their LCD operations, the reports state.
Hitachi had been negotiating the sale of a majority stake in its small-LCD business to contract electronics manufacturer Hon Hai Precision Industry of Taiwan, otherwise known as Foxconn, according to a Financial Times report. INCJ being prepared to inject more than a billion dollars in Japanese LCD manufacturing may explain Hitachi's desire to get involved in a Japanese joint venture.
If agreement is reached the INCJ may double its previous investment plan and provide 200 billion yen (about $2.5 billion) for a 70 percent stake in the super-company with Hitachi, Sony and Toshiba dividing the remaining 30 percent between them.
The three companies are expected to reach an agreement in July, a Reuters report said.
The moves are seen as an attempt to prevent mistakes made in the past with regard to large-size LCDs for televisions. Japan largely lost out in this market because manufacturing was split between numerous Japanese consumer electronics companies.
The world seems to moving into a direction of forming a giant assembly line. The manufacturing of parts and the creation of products are done through different companies. If manufacturing of LCD is concentrated to only a few companies, like Kinnar said, will monopoly be formed? What would be the impact to the price of final good?