Sony seeks to quit Samsung LCD venture: report

October 31, 2011 | 07:09

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Sony has entered talks to sell its stake in a joint liquid crystal display panel venture in South Korea to its partner Samsung Electronics, the business daily Nikkei reported on Sunday.

The Japanese electronics giant aims to reach an agreement with Samsung on the sale within this year but the talks could be complicated as the South Korean firm will be forced to secure a new buyer if the two companies part ways, Nikkei said.

As LCD panel prices continue to slide due to a supply glut, Sony is increasingly relying on other manufacturers for the key TV component as part of its cost-cutting efforts, the daily said.

No official was immediately available at Sony's head office to comment on the report.

In 2004, Sony and Samsung Electronics set up the joint venture, S-LCD Corp., as the two leading television makers wanted to secure a stable supply of LCD panels.

Samsung Electronics has a stake of 50 per cent plus one share in the joint venture with Sony holding the remaining shares.

From 2004 to 2009, Sony spent a total of 1.95 trillion South Korean won (currently about $1.8 billion) to ramp up S-LCD's output capacity, Nikkei said.

The Japanese manufacturer purchases about half of the LCD panels produced by the joint venture.

In the year to March 2011, Sony posted an operating loss in its TV business division for the seventh consecutive year, with its accumulated loss exceeding 450 billion yen ($6 billion), the daily said.

The company plans to sell 22 million TV sets throughout the world in the year to March 2012, down two per cent on the year, Nikkei added.

AFP

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