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Sony Quits LCD Joint Venture with Samsung

Sony and Samsung are in joint venture in the form of S-LCD Co. for making LCDs for TVs, but it will soon become a history as Japanese company has announced that it will quit the 50-50 venture by selling its share for US$940 million to the Korean competitor. Remember, both companies remain in collaboration for seven years.

Samsung is all set to take up Korean-based joint venture into its current LCD business after finalizing the agreement with Sony. It will become the 100% subsidiary after absorbing into the Samsung existing business. This will make the Samsung’s LCD business to become the second largest in the world by revenue, just behind the LG Display.

The decision has been made by Sony in accordance with the recurrent losses in its TV unit for years. Sony said that the separation from Samsung will end up in saving around US$640 million each year. Sony announced its financial report predicting a US$1.15 billion loss for this fiscal for the company as a whole last month. However, it didn’t say anything about the revision of the forecast.

Despite exiting LCD joint venture with Samsung, both the companies still work together in display area. The Japanese company says that it will continue to produce TVs. Further added, “It has entered into a new strategic agreement for the supply and purchase of LCD panels with a goal of enhancing the competitiveness of both companies.”

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