Business

Monday March 30, 2009

Toshiba to take 100% stake in LCD venture


JAPAN’S Toshiba Corp plans to take a 100% stake in its struggling liquid crystal display (LCD) joint venture with Panasonic Corp, a source said.

Toshiba Matsushita Display Technology, currently owned 60% by Toshiba and 40% by Panasonic, is the world’s second largest maker of small and mid-sized LCD panels used in cell-phones, car navigation systems and other devices.

Toshiba has decided to buy Panasonic’s 40% stake for several billion yen, according to the source, confirming an earlier report in the Nikkei business daily.

Hit by falling prices and sluggish demand, Toshiba Matsushita Display is expected to post an operating loss of 30 billion yen on sales of 270 billion yen for the financial year ending this month.

Despite the earnings downturn, Toshiba still viewed the small and mid-sized display business as an important business and taking a 100% stake would allow it to accelerate decision-making and restructuring, the source said.

At the same time, the deal should allow Panasonic, the world’s top maker of plasma TVs, to focus more of its resources on large displays, though it will still hold 25% in another small and mid-sized LCD venture majority owned by Hitachi Ltd.

Toshiba Matsushita Display held 10.3% of the global market for small and mid-sized LCDs in 2008, second only to Sharp Corp’s 20.2% share, the Nikkei said, citing figures from research firm DisplaySearch.

The move will mark the latest realignment of the LCD sector. — Reuters

Earlier this month NEC Corp said it would close an LCD plant in Japan while Sony Corp and Seiko Epson Corp announced they were considering an alliance in small-sized LCDs.

After making the venture wholly-owned, Toshiba planned to scale back production of amorphous silicon panels, which had been hit hard by sliding prices, and focus on higher-end polycrystalline silicon panels, the Nikkei said. — Reuters


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