Sony and Sharp delay joint venture plans for large-sized LCD Panels

[Johnny]

The global financial crisis begins to take its toll: Sony Corp. and Sharp Corp. said that they postpone formal establishment of the joint venture that will operate 10th generation LCD fab.

Faced with changes in the world economy, Sharp and Sony amended and extended the non-binding memorandum of understanding to confirm their mutual intent to postpone the targeted establishment of a joint venture until March 2010, approximately one year later than originally scheduled. Sharp and Sony will, through continued discussions of how the two companies can best deploy their resources and expertise, continue to negotiate in good faith and have set June 30, 2009 as the target date by which to enter into a definitive agreement to establish a joint venture that will be mutually beneficial for both companies.

Despite the postponement of the joint venture, Sharp plans to start operating its new LCD panel factory in Sakai City, Osaka Prefecture (currently under construction) by March 2010 as originally scheduled.

10th generation LCD factories will process substrates that have sides of 3 meters or longer, whereas currently utilized 8th generation factories process LCD substrates that have sides of 2.2 – 2.5 meters.

On February 26, 2008, Sharp and Sony signed a non-binding memorandum of intent regarding the establishment of a joint venture to produce and sell large-sized LCD panels and LCD modules using the world’s first 10th generation mother glass substrates (the "MOI"), and since then the two companies have been negotiating to enter into legally binding joint venture documentation.

[Scubie67]

Samsung LCD claims that the new joint venture would not affect the Samsung-Sony LCD partnership. Both Sharp and Samsung make flat TVs under their own brands, and Sony, Sharp and Samsung are competing for their piece of the global flat-TV pie.

[Addis]

Surveys have shown that Samsung leads in LCD TV sales with Sony to follow. Sharp, which is struggling to gain overseas brand recognition, still trails Samsung and Sony.