Toshiba's laptops are displayed at an electronic shop in Tokyo November 9, 2010.
Credit: Reuters/Kim Kyung-Hoon
TOKYO | Mon Jun 6, 2011 7:59pm EDT
(Reuters) - Toshiba Corp and Sony Corp are in the final stages of talks to combine their small LCD panel units and sell up to 80 percent of the new entity to the Japanese government, the Nikkei business daily reported on Tuesday.
The government-backed investment fund Innovation Network Corp of Japan will invest about 100 billion yen ($1.24 billion) to own 70-80 percent of the merged entity, which aims to become the market leader in panels used in devices such as smartphones and tablet computers, the Nikkei said citing unidentified sources.
The new unit would overtake Sharp Corp as the leading maker of small liquid-crystal display (LCD) panels, the Nikkei said.
Toshiba Mobile Display Co had 9.2 percent of the global small LCD panel market in 2010 while Sony Mobile Display Corp had 6.1 percent, behind top-ranked Sharp's 14.8 percent share, the newspaper said.
The new company may use the funds to introduce cutting-edge production lines at a Sony plant in Aichi Prefecture's Higashiura, the Nikkei reported.
It will also develop technologies to mass-produce OEL (organic electroluminescence) panels, which deliver higher resolutions than LCD panels while consuming less power, the paper said.
Company spokesmen at both Toshiba and Sony said they were unable to immediately comment on the report.
Increasing demand for smaller panels used in popular devices such as Apple's iPad and iPhone last week led Sharp to forecast an unexpected jump in operating profit for its current business year.
Toshiba and Sony are seeking a basic agreement this month and the entity is expected to be formed later this year, the paper said.
(Reporting by James Topham in Tokyo, Arpita Mukherjee in Bangalore; Editing by Chris Gallagher)
Credit: Reuters (www.reuters.com)
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