MANHASSET, N.Y. Japanese display makers Hitachi Ltd., Toshiba Corp. and Matsushita Electric Industrial Co. Ltd. have agreed to establish a joint venture to manufacture and sell LCD panels for flat-panel TVs that would begin operating January 2005.
The three companies have reportedly been negotiating to form a joint venture to compete with Taiwanese and Korean LCD suppliers that have established next-generation fabs to build LCD TV panels.
The joint venture will build an amorphous thin-film-transistor LCD panel production line at the Mobara facility of Hitachi Displays Ltd., Hitachi's wholly-owned subsidiary. The plant will begin mass production the latter half of 2006 and ramp production in stages, reaching the equivalent of 2.5 million 32-inch TV LCD panels a year by early 2009.
The joint venture will focus on 26- to 32-inch panels for LCD TVs. "The joint venture will concentrate on this size, the mainstream sizes in large panels," said Etsuhiko Shoyama, president of Hitachi. "Among the various size panels, this size range is the most sellable. By concentrating on this zone, the joint venture will be able to offer the panels with competitive cost."
Total capital investment for the joint venture is about $1 billion (¥110 billion). Hitachi will own 50 percent of the venture, Toshiba and Matsushita between 21 to 25 percent each, with the remainder to divided up among other device makers and material suppliers solicited to manufacture the LCD panels.
With analysts projecting global demand for LCD TVs increasing five-fold from 3 million in 2003 to 15 million by 2006, display suppliers have come under mounting pressure to establish fabs that can handle large glass substrates for flat-panel TVs. Moreover, TV makers targeting high-end markets seek to differentiate their products not just with proprietary image processing technologies, but also by using LCD panels with outstanding picture quality.
Display suppliers have responded by forming partnerships and alliances to pool financial, manufacturing and technology resources.
In July, Samsung Electronics Co. Ltd., launched a joint venture with Japanese rival Sony Corp. called S-LCD Corp., likely raising the urgency for other Japanese suppliers to team up.
Hitachi, Toshiba and Matsushita expect to realize synergies in their LCD TV panel collaboration. For instance, the joint venture would utilize Hitachi Displays' IPS mode system technology, which reportedly provides a 170-degree viewing angle and good color reproduction for high-resolution, digital TV broadcasts.
LCD panels produced by the joint venture will be shared mainly among the partners, although the proportion used by each company will not necessarily depend on the ratio of the investments, said Fumiaki Yonai, president and CEO of Hitachi Display. While the joint venture will supply each company, all three will be free to purchase panels from other suppliers, the partners said.
Yoshiko Hara contributed from Tokyo.