Sony, Toshiba, Hitachi to set up joint LCD company

Sony Corp., Toshiba Corp. and Hitachi Ltd. have largely agreed to integrate their operations for small and midsize liquid crystal display panels for mobile and tablet devices such as smartphones, sources close to the deal said Tuesday.

The three manufacturers are expected to formally announce as early as Wednesday the planned establishment of a new firm that is set to control a world-leading share of over 20 percent of the global LCD panel market.

The move comes as the firms aim to expand their businesses amid intensifying competition with South Korean and Taiwanese manufacturers while demand for smartphones grows.

The government-backed investment fund Innovation Network Corporation of Japan will provide about 70 percent of the investment in the integrated firm, while the three manufacturers will each put up about 10 percent, with eyes on development and mass production of second-generation organic EL display panels.

Japanese manufacturers had traditionally been leading producers of liquid crystal display panels, but their share of the large liquid crystal display market has fallen to about 10 percent recently.

They still hold around a 40 percent share in the small and midsize display market, but this has been eaten into by South Korean and Taiwanese manufacturers.