Big Blue to focus on big monitors

IBM winds down a joint LCD venture with Toshiba and plans to specialize in large flat-panel, high-res displays for a new partner.

IBM will focus its display business solely on large flat-panel displays with high resolution in the coming years.

In Tokyo, the tech giant announced a partnership with Taiwan-based Chi Mei Optoelectronics to develop and manufacture large-panel LCDs (liquid crystal displays) for computers. Financial details and the terms of the agreement were not released.

The Chi Mei deal replaces IBM's 12-year-old joint venture with Toshiba to manufacture LCDs of various sizes. IBM and Toshiba evenly split the costs and revenues from the company, Display Technologies. The joint venture will dissolve by late August.

Display Technologies was one of the early leaders in the LCD market, but the two companies decided to end the pact when it became clear they no longer shared the same agenda.

"IBM and Toshiba were going in different directions," Barry Young, an analyst at market researcher DisplaySearch, said Friday. "With the falling prices of LCDs, it's getting harder for companies to make any money and, as a result, everyone is looking for new markets to address. These two happen to be looking in different places."

According to a statement from Toshiba and IBM, Toshiba will expand its display business to concentrate on mid-to-small-sized LCDs for devices such as handhelds and cell phones, while IBM will focus on larger, high-resolution LCDs for computer monitors.

Toshiba and IBM will split the assets of Display Technologies according to their objectives. Display Technologies' medium-to-small panel production line will be transferred to a Toshiba subsidiary, while the rest of the company will become an IBM subsidiary for large panel production.

Chi Mei will purchase the development and production assets of Display Technologies from IBM and will license intellectual property for LCDs from IBM.

In late February, Toshiba announced it will team with Matsushita to establish a Singapore-based company to manufacture LCDs for handhelds and mobile phones. Production is scheduled to start in July 2002.

In late June, IBM launched the T220, an LCD with a 22.2-inch screen and more than 9 million pixels. The T220 displays 12 times more detail than current LCDs but initially will cost US$22,000.

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