Sony Corp. and Samsung Electronics Co. of South Korea have begun final negotiations on establishing a joint venture to produce liquid crystal display panels, industry sources said Friday.
Samsung has acquired land in central South Korea for the 50-50 joint venture, the sources said. The venture will be capitalized at 200 billion yen and may start producing LCD panels late next year with a monthly target of 100,000 units, they said.
The factory will produce 1.9 × 2.2 meter seventh-generation LCD panels, which are larger than conventional panels and can provide a greater number of television screens from each panel, helping boost cost competitiveness.
The move comes as Sony, the world's leading TV manufacturer, hopes to boost its presence in the rapidly growing market for flat-panel TVs featuring LCD panels and plasma display panels.
Samsung, the world's top LCD maker, hopes to exploit the alliance with Sony as it is believed flat panels will become the global mainstream for TV sets in the near future.
Late last month, Sony confirmed it had begun talks with Samsung on the joint venture.
A Japanese business daily reported in its Friday edition that the companies are expected to sign the agreement next week pending approval by the Samsung board.
A Samsung executive is due to become the new firm's chief executive officer, the paper said.
The plan is for Sony and Samsung to receive half the output from the joint venture for use in the television sets they manufacture as well as for sale to other companies, the daily said.