Sony Seeks to End LCD Joint Venture with Samsung

Sony is in talks to terminate its LCD production joint venture with South Korea’s Samsung Electronics, said sources quoted by Mainichi Daily on Sunday. Sony is seeking to sell to Samsung its 50% ownership stake in S-LCD Corp which is based in S. Korea.

Since 2004 Sony has invested 130 billion yen ($1.7 bil.) for a 50% equity in the venture, including various facilities expansions since then. The deal gives Sony access to half of S-LCD’s output. However, because of falling demand for LCD panels in Japan Sony says it has been losing money on the LCD panels it obtains from S-LCD. It hopes to sell its stake and turn to lower-cost LCD panels from manufacturers in Taiwan and elsewhere. Its TV-related business will be in the red this fiscal year through next March for the eighth straight year.

The demand for LCD TVs in Japan has fallen off sharply because the transition to digital terrestrial broadcasts is nearly complete. It has also been hurt by the economic slowdown in the US and Europe.

Sony appears to be shifting more resources toward the more profitable mobile phone business. Last Thursday it agreed to take sole ownership of the Sony Ericsson mobile phone joint venture by acquiring the 50 percent stake held by Telefonaktiebolaget LM Ericsson.