Sony, Sharp Put LCD Venture On Ice

Last February, the companies signed a nonbinding memorandum of intent to establish a joint venture to produce and sell large-sized LCD panels and modules. The venture called for the use of 10th generation mother glass substrates in LCD production.

While the companies have put their venture on hold, Sharp said it still plans to open the LCD factory, Osaka Prefecture, in March 2010, as originally planned.

"The parties will aim through this collaboration to further strengthen Sharp's advanced LCD display technologies and Sony's competitiveness in the TV market," the companies said in a statement at the time.

Sharp and Sony last year said they were in discussion about possibly jointly developing components for LCD modules. The companies did not comment about the plans Thursday.

Under the agreement, Sharp's investment stake in the project was 66 percent and Sony's was 34 percent.

The news is not a total surprise: In December, Sharp said it was closing small and midsize LCD panel manufacturing lines at two Japanese plants this month, as global demand for LCDs continued to wane.

Earlier Thursday, Sony said its profit dropped 95 percent for its third quarter ended Dec. 31, which includes the first-ever operating loss from its electronics division. The company also forecast a loss of $1.67 billion for the fiscal year ending March 31.

Sony attributed the sharp losses to the worsening economy, a strong appreciation in the yen and sagging earnings in its affiliates, particularly Sony Ericsson.