Samsung to buy Sony stake in LCD joint venture

-- Samsung Electronics and Sony agree to end LCD joint venture

-- Seven-year collaboration cost billions for factories now yielding little return

-- Samsung will pay about $940 million for Sony's share in the 50-50 JV

-- Samsung to also take over affiliate Samsung LED, a maker of LRDs

Samsung Electronics Co. and Sony Corp. on Monday agreed to end their joint venture making liquid crystal displays for TVs, a seven-year collaboration into which both firms poured several billion dollars to build factories that are now yielding little return.

Samsung will pay about $940 million for Sony's share in the 50-50 venture, called S-LCD Co., the companies said. Samsung will fold the venture into its LCD business, which is the world's second largest by revenue after LG Display Co.

Separately, Samsung said it would take over the portion of another affiliate, Samsung LED Co., a maker of light emitting diodes, owned by another related company, Samsung Electro-Mechanics Co.

Light emitting diodes, or LEDs, have become a core component in the majority of Samsung TVs. Company officials in recent months have said they plan to push hard into the still-emerging market of LED light bulbs.

The breakup of the S-LCD venture, in which two of consumer electronics' biggest rivals united to share the high capital costs of new factories, is a vivid indicator of the rapid decline in fortune of LCDs.

The business churned huge profits for manufacturers in the middle of last decade. But manufacturers overbuilt and demand, even with the onset of new gadgets like tablet computers, hasn't kept up with their ability to produce LCD screens. Samsung's display component business reported an operating loss in each of the first three quarters of the year.

In another indication of the turnabout, Sony said it expects to save about 50 billion yen, or about $640 million, a year by exiting its venture with Samsung. It added it will take a one-time charge of about $845 million to reflect a reduction in value.

Samsung said Sony will remain a customer of LCDs, particularly for TVs, that it produces. The company said that by owning the S-LCD manufacturing capacity outright that it will have greater flexibility for planning and output with the rest of its LCD factories.

LCD panels are the main component in cellphones, computers, TVs, digital cameras, media players and other gadgets. The business exploded from virtually nowhere in the last 15 years.

As glass and assembly processes improved, the size of LCD panels grew and firms in Japan, South Korea and Taiwan, built huge factories that cost $2 billion or more apiece, cranking out displays that became common in a huge number of products.