Sony, Samsung Discuss LCD Collaboration

Japanese electronics and entertainment giant Sony is in talks with Samsung Electronics of South Korea about cooperating on making liquid crystal displays, Sony said Friday.

Such displays are used in making flat-screen television sets, which have been growing more popular worldwide.

Sony has been struggling to reclaim its once unquestioned glamour in the global electronics industry amid competition from emerging Asian rivals, including Samsung, which have been able to take advantage of cheaper labor costs. Sony has long dominated the TV sector but has lately fallen behind rivals in wooing buyers to flat-panel TVs.

Japan's business daily Nihon Keizai Shimbun reported Friday that Sony and Samsung have reached a preliminary agreement to set up a 200 billion yen ($1.8 billion) joint venture that will produce liquid crystal displays in South Korea as early as next year.

"It is true that talks with Samsung are continuing about joint production of liquid crystal display panels," Sony said in a statement. "But there has been no formal decision, and we would like to decline comment."

Sony said in May it would consider making liquid crystal display panels for flat-screen TVs. Itv now buys panels from other makers. Last month, Sony said it is in talks with several companies, including Samsung, about a possible investment in liquid crystal display operations.

If the new alliance is set up, Sony and Samsung would be seeking to play catch-up with Japanese electronics maker Sharp Corp., which controls about 60 percent of the world market in flat panel TVs. Samsung, the world's biggest maker of computer memory chips, is also a major supplier of such displays.

After posting a loss for the first three months of this year, Sony jumped back in the black the following quarter, but profits dwindled to 1.1 billion yen ($9 million) from 57.2 billion yen a year ago as sales dipped nearly 7 percent.

In response to the growing competitive edge of Asian electronics manufacturers, Japanese companies, such as Toshiba Corp. and Sanyo Electric Co., have been setting up partnerships with them recently.

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