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Samsung buys out Sony’s stake in S-LCD joint venture

Back in 2004, Samsung and Sony formed a joint partnership named S-LCD to manufacture flat-panel LCD displays, splitting the costs of rolling out manufacturing facilities for large flat panel displays so both companies could better compete with the likes of Sharp. As recently as 2008 the companies committed $1.8 billion to the venture to build a new manufacturing facility, but now Sony has thrown in the towel: Samsung is buying out Sony’s 50 percent stake in S-LCD for a little over 1.08 trillion Korean won, or about US$935 million.

The move comes as Sony looks to cut costs as it faces the possibility of eight straight years of losses in its television business. Sony is banking that it will be able to better compete against the likes of Sharp, Samsung, Toshiba, and other flat-panel manufacturers buy buying panels for its own TVs at going rates rather than sinking massive amounts of money into production facilities. Sony will buy panels from Samsung as well as from other manufacturers.

The companies expect the deal will be concluded in mid-January 2012.

Sony hasn’t indicated how the sale will help its full-year financial results, but the company has said it expected to post a loss of ¥66 billion (about US$845 million) for the third quarter of its fiscal year, which wraps at the end of December.

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