Toshiba Corp. and Sony Corp. are considering integrating their businesses in small and midsize liquid-crystal display panels for mobile devices such as smartphones and tablet computers, sources said Tuesday.
If the integration is realized, the new company could become the sector's global leader in terms of market share, exceeding that of Sharp Corp.
The firm would be created through the integration of Toshiba Mobile Display Co. in Saitama Prefecture and Sony Mobile Display Corp. in Aichi Prefecture, with the aim of countering South Korean and Taiwanese rivals, the sources said.
The Innovation Network Corporation of Japan, a government-backed investment fund, would invest in the integrated firm, which could be established as early as this year. The new company would aim to boost Japan's competitiveness in the field through cooperation of the public and private sectors, the sources said.
The integrated company would also try to produce organic electroluminescent panels, to challenge the large market share of South Korea's Samsung Electronics Co., they said.
In 2010, Toshiba was ranked fourth in the global market for small and midsize LCD panels with a 9 percent share, while Sony controlled nearly 6 percent, putting it in seventh place, U.S. research firm DisplaySearch said.
With price-cutting intensifying competition worldwide, Japanese firms have faced difficulties turning a profit from sales of large LCD TV panels, forcing them to exit the market or scale down their operations.
But in terms of small and midsize LCD panels, high-performance functions such as a touch panels have helped domestic manufactures remain globally competitive.
Toshiba already plans to build a new plant in Ishikawa Prefecture to make LCD panels for Apple Inc.'s iPhone.
