Sony buys one-third stake in Sharp LCD factory

Just yesterday, we reported that the global LCD market may be shaken up by major alliance between two of the top players.

Rumours of the web suggested that Sony, which is currently number two in the global LCD TV market, may soon annoucne it is to buy LCD panels from its rival, and the current market number three, Sharp.

Bloggers weren't far off.

Today, Reuters in Japan has confirmed that Sony is to take a one-third stake in Sharp's $3.5 billion LCD panel plant, which is set for completion by March 2010.

According to Reuters, Sharp plans to turn the liquid crystal display factory, which would be the world's largest, into a joint venture.

It will own 66% and Sony is mooted to be taking the remainder.

Besides LCD panels, the joint venture will also produce LCD modules - in other words - display panels equipped with components such as a backlight unit and LCD driver chips.

Sharp's new factory will use 10th-generation glass substrates, "which can yield more panels than earlier-generation, smaller glass substrates, improving production efficiency and helping both firms offer attractively priced flat TVs", adds the news service.

Sony announced last year its ambition to sell 10 million units of its Bravia LCD TVs in the current business year to 31 March.

While this date is getting closer, the new venture with Sharp is sure to ensure that it will meet rising demand for LCD TVs next financial year.

It is expected to continue its current LCD joint venture, S-LCD, with Samsung.