Sony bolts Japan group for LCD production

March 8, 2004 – Bucking the will of the Japanese government’s national LCD project, Sony Corp. has finalized a 50-50 joint venture with Korea’s Samsung Electronics Co. Ltd. to produce amorphous TFT-LCD products, a project that’s been in the works since October 2003.

S-LCD Corp., to be established next month with initial capitalization of 2.1 trillion won ($1.79 billion), will incorporate a seventh-generation TFT-LCD panel production line at Samsung’s facility in Tangjeong, which is now under construction. Equipment investment, estimated at $2 billion, is planned to begin this summer, with mass production of up to 60,000 panels/month (mainly for large-screen LCD-TVs) targeted for 2Q05. A representative from Samsung will be picked to be S-LCD’s president and CEO; Sony will place the CFO and a representative executive.

The deal illuminates a rift between Sony and the government’s Ministry of Economy, Trade and Industry (METI), which reportedly was strongly against this international collaboration, according to Japanese industry sources. Rather than participate in forced cooperation with the national LCD development project, Future Vision, Sony chose to partner with a foreign entity to create S-LCD, which it believes is much more promising and realistic than the national project.

Future Vision was formed in 2002 by seven Japanese firms: Sharp, Hitachi, Seiko Epson, Omron, Tokyo Electron, Dai Nippon Screen Manufacturing, and Taisei Corp., with R&D and pilot manufacturing operations set up at Tohoku U.


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