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Major electronic companies divided into three camps for slim TV manufacturing

1, 23. 2008

   The electronic industry is rapidly restructuring itself over the production of the thin display panels, the key component of slim-type TV's. Tie-ups among companies in the industry have been re-arranged, and two new alliances are being formed. They are the Sharp-Toshiba and Matsushita Electric Industrial-Hitachi-Canon alliances. Adding to the alliance formed by Sony with Samsung of South Korea, there will be three major camps in the electronic industry to battle against each other over the LCD TV business.

Sharp in leading position attracted Toshiba

Battle may start among slim TV makers
Battle may start among slim TV makers

   The Sharp-Toshiba was the first formation of the ties that was revealed. Under the arrangement, Sharp will provided Toshiba with LCD panels. In return, Sharp will receive supplies of the state-of-the-art semiconductors from Toshiba. Toshiba will sell its shares in a joint company formed with Matsushita and Hitachi to produce large LCD panels and withdraw itself from the LCD panel production.

   Sharp leads other companies in the slim-type TV market. A problem of the company is that it too heavily relies on the TV business. A little failure in the TV business might thus cause disaster to its entire management. Through the latest tie-up arrangement, the company has succeeded in securing a stable supply destination for LCD in addition to Pioneer, with which the company has already concluded a capital tie-up agreement. The company has also succeeded in luring Toshiba into its camp.

   For Toshiba, which has been focusing its operating resources on semiconductors and atomic power generation, levering up of its slim TV division was a challenge. Toshiba was trying to start mass production of TV sets with the organic display (OELD) which is considered to be the next-generation TV display panel. Atsutoshi Nishida, president of the company, said, however, that the LCD produced by Sharp is of better quality than the OELD, and the company has revealed it is reconsidering the OELD mass production plan.

   The announcement of the Matsushita-Hitachi-Cano alliance that of Sharp-Toshiba. The three companies will invest 24.9% each in Hitachi's wholly owned company to manufacture LCD's for medium and small TV's and OELD's. Canon is to raise the investment further to own a majority of the shares in the company. Matsushita will increase its investment in a company that has been jointly managed to produce large LCD with Hitachi and Toshiba to own a majority of shares in the company.

Matsushita will strengthen LCD TV division

   Matsushita has been expanding the sales mainly of plasma TV's as it is strong at the production of large-display-panel TV's. But it is ready also to strengthen its LCD TV division which the company has not given much attention in the past. Fumio Otsubo, president of the company, said that the enlargement of the LCD is progressing at a faster speed than expected. He also indicated the company might consider the production of OELD's. Canon will take advantage of the alliance for the strengthening of the ability to produce medium and small LCD and OELD panels.

   Hitachi, in the meantime, seems to have bearing heavier burden in maintaining its subsidiary to produce TV panels on its own following the announcement of its midterm account report for the tem ending September 2007, in which it declared the operation red figure of almost 50 billion yen from its slim TV division. Kazuo Furukawa, president of the company, said the company will rearrange the management resources to establish stable, high-profit earning structure, stressing its readiness to make a progress in rearranging "selection and concentration" of the business operations.

   Of the three major Japanese slim TV makers, Sharp and Matsushita has made the move toward forming a tie-up. Remaining Sony has already entered the joint production of LCD panels with Samsung Electronics of South Korea. Ryoji Chubachi, president of the company, indicated during a press interview that the company is ready to form tie-ups with companies other than Samsung. Sony is also determined to mass-produce larger models of OELD TV's, which have been sold by Sony for the first time in the world, in order to maintain its leading position in the industry.

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