Japanese trio form mobile display JV

Caroline Gabriel/Wireless Watch
05 Sep 2011

The transaction should be completed early next year, subject to antitrust approval, and will be 70% owned by the government backed Innovation Network Corporation of Japan, which will invest 200 billion yen ($2.6 billion).

These funds will be used to build new production lines, particularly for growth technologies like slim AMOLEDs, and hire an external management team.

The three manufacturers will divide the remaining 30% between them and will appoint board directors. Sony and Hitachi are unprofitable in LCDs, while Toshiba just scraped back into profit for the business at the end of its most recent fiscal year.

The joint venture plans to sell shares in an IPO by March 2016, and has set a target of increasing sales to at least ¥750 billion by then, from an estimated ¥570 billion in the fiscal year ending March 2012.

“For each of the three companies, capital spending would continue to be a burden and it‘s hard for them to stay competitive on their own,” Yuichi Ishida, an analyst at Mizuho Investors Securities, told Bloomberg. “It's probably a plan led by the government trying to boost presence of Japanese manufacturers in the global market.”

Sony, Toshiba and Hitachi accounted for a combined 22% of the market for small- and medium-sized LCDs (up to 9-inches) in 2010, according to figures from DisplaySearch. Fellow Japanese vendor Sharp had 15%, followed by Samsung Display and Taiwan‘s Chimei Innolux on 12% each. Sony acquired its small LCD business from Seiko Epson in 2009.

Related content

No Comments Yet! Be the first to share what you think!