Japanese electronic makers Matsushita, Canon and Hitachi said Tuesday they will form an alliance in liquid crystal panels in the latest tie-up in the lucrative but cutthroat sector. The companies said Canon Inc and Matsushita Electric Industrial Co Ltd will each take 24.9 percent stake of Hitachi Ltd unit Hitachi Displays Ltd by the end of March.
Details of the deal will be decided later, but the agreement should help the companies meet the increasing demand for LCD panels while keeping cost down and maintaining steady supply, a joint statement said. The three firms "reached a basic agreement on a comprehensive alliance aimed at reinforcing and growing the liquid crystal display panel business and technologies," it said.
Hitachi hoped to beef up development of cutting-edge LCD panels through the agreement and to promote sales of LCD television sets. Canon would gain stable supplies of LCD panels, which should help the company cut the time necessary to develop new products, the statement said.
Matsushita, known for its Panasonic brand, also hopes to secure stable supplies of LCDs, although it will maintain its main focus on plasma display panels (PDP) for its line of thin television sets. An earlier report in the Nikkei business daily said the three companies also planned to invest in a 300 billion-yen (2.6 billion-dollar) new factory to make small and midsized LCD panels.
The three-way deal comes as the Japanese electronics industry goes through realignment amid increasingly fierce competition. Japanese manufactures Sharp Corp and Toshiba Corp said last week they would collaborate to meld Sharp's technologies in liquid crystal displays with Toshiba's expertise in image-processing chips, which are becoming ever more vital for advanced TVs.
Sony has taken a step ahead, launching the world's first OLED television last month. Sony's next-generation flat television is just three millimetres (0.12 inches) thick, which was made possible because the organic display is self-luminescent and does not require a backlight.