Japan--According to a story from Reuters based on information from two sources "with knowledge on the matter," Hitachi is now in talks with Toshiba and Sony about joining the merger of their liquid-crystal display (LCD) units—a move that would create the world's largest maker of small panels. Hitachi has already been in separate talks with Hon Hai Precision Industry (Taiwan) about a joint venture in LCD panels but those talks have hit difficulties, one of the sources said, making Hitachi more likely to join the domestic Japanese partnership.
If the three-way alliance goes ahead, the mainly government-funded Innovation Network Corporation of Japan will consider investing about 200 billion yen ($2.5 billion dollars) in the merged unit. The Nikkei newspaper earlier reported the government fund would likely gain a 70% stake for that amount and the three companies would then split the remaining interest.
Even though Hitachi declined to comment, Toshiba and Sony are negotiating to merge subsidiaries making the small LCD panels, which are used in tablets and smartphones, as they battle harsh competition from Asian rivals like Samsung (Korea). Hitachi wants to distance itself from the volatile panel business, which requires regular large-scale investment to keep up with cut-throat price competition, in order to focus on its social infrastructure business.
Japan's Sharp Corporation, currently the world's largest maker of small LCD panels, said this month it would switch most production at one of its TV panel plants to small panels.
SOURCE: Reuters; www.reuters.com/article/2011/06/30/us-hitachi-sony-toshiba-idUSTRE75T0B420110630
