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Hitachi Ltd., Matsushita Electric Industrial Co. and Toshiba Corp. will set up a 70 billion yen joint venture in January to manufacture liquid crystal display panels for flat TVs, the firms said Tuesday.

Rivals such as Sharp Corp. and South Korean makers have already cranked up production to grab a larger share of the rapidly growing market.

The three companies said the joint venture is aimed at securing a steady supply of LCD panels.

According to a plan unveiled by the firms, the new venture is scheduled to start mass production of LCD panels at one of Hitachi’s existing facilities in Chiba Prefecture during the July-September quarter of 2006.

Designed to make panels for 26-32 inch TVs, the joint venture is expected to produce 2.5 million panels a year when it reaches full capacity sometime between October 2008 and March 2009.

Hitachi will hold half of the stake in the joint venture and Matsushita and Toshiba will share the remainder.

Toshiba President Tadashi Okamura told a joint news conference that the company must stay competitive with rivals at home and overseas.

The three companies forecast that worldwide demand for LCD TVs will increase fivefold in 2006 from some 3 million units in 2003.

Matsushita and Toshiba already have a joint LCD panel company that mainly produces panels for car navigation systems and mobile handsets. The two buy their LCD panels from rivals, including Sharp.

Hitachi manufactures LCD panels for TVs. Matsushita and Toshiba said they decided to join hands with Hitachi to make the most of its technology that enables a wide viewing angle.

Rival makers have already started working on plans to produce large LCD panels.

Sony Corp. will begin mass producing LCD panels next summer as part of a $2 billion joint venture with Samsung Electronics Co. of South Korea.

Sharp in January launched a system of integrated manufacturing, and now makes LCD panels and assembles TV sets at its Kameyama plant in Mie Prefecture.

U.S. market research firm DisplaySearch said Sharp and LG Philips each had a 27 percent share of the global market of LCD TV panels in 2003, followed by Samsung, with 15.3 percent.

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