Sony Buys 33 Pct Stake in Sharp LCD Plant

Sony has announced it will buy a one-third stake in a $3.5 billion LCD plant being built by Sharp, in a long-term effort to meet demand for flat-panel TVs.

Sony Corporation has announced it will be buying a one-third stake in a $3.5 billion LCD panel plant being constructed by Sharp, scheduled to be operational in early 2010. The move marks the latest alliance among television manufacturers to pool their resources and cut the size of their investments in the technology. Although consumer demand for flat-panel televisions is rising, price declines have made manufacturers wary of infecting heavily in fabrication facilities. The Sony-Sharp plant, when completed, will be the world’s largest LCD manufacturing facility.

Sony and Sharp are currently the second- and third-largest LCD panel makers, behind South Korea’s Samsung Electronics. In addition to flat-panel TVs, the plant will make LCD modules pre-fitted with add-ons like controllers and LED backlighting.

The announcement follows a recent partnership between Hitachi, Matsushita, and Canon on LCD displays, and an agreement that has Toshiba buying LCD flat panels from Sharp. It may also set the stage for a price war in 2010 and 2011, when both Sharp’s LCD facility and a new factory from Matsushita come online.