Hitachi, Toshiba and Matsushita Electric
have formed a joint venture to manufacture large liquid-crystal
displays for flat-screen televisions, escalating competition for a
piece of the digital living room.
The three Japanese giants said Tuesday that they will pour US$1 billion
into the new company, which has yet to be named. The companies plan to
build a manufacturing facility in Mobara, Japan, on a site owned by
Hitachi Displays, an LCD unit of Hitachi.
The plant is scheduled to begin operations in 2006, and will churn out
2.5 million 32-inch panels a year in 2008, according to the companies.
The factory will cut panels from so-called sixth-generation
"motherglass," which will measure at least 59 inches by 70.9 inches.
The companies said they also plan to manufacture an Advanced
Super-IPS (In-Plane-Switching) LCD panel, which is believed to produce
better image quality.
In a joint statement, the companies said they expect that
demand for large flat-panel televisions will keep growing rapidly, from
about 3 million units in 2003 to nearly 15 million in 2009.
More and more, consumer electronics companies have been teaming
up to invest in manufacturing plants as they seek a steady stream of
supply for their TV businesses. The ebb and flow of panel production
often leaves companies competing in the open market for screens, which
has historically made the industry highly volatile when it comes to
price. This often can unpredictably affect revenue for the companies.
Instead of building expensive plants, often costing billions of
dollars, companies have been forming joint ventures that spread the
cost and risks. So far, it looks like the risk is worth the reward for
consumer electronics companies, as the popularity of LCD televisions
Last month, S-LCD--a joint venture formed by Samsung and Sony--announced the completion of an LCD manufacturing facility
in South Korea. Mass production of the LCD panels is slated to begin in
the first half of next year. The plant is designed to churn out 60,000
panels a month.
Meanwhile, Sharp, the current top seller of LCD televisions in
the Japanese market, built its flagship facility in Kameyama in western
Japan last year. It has already started shipping products built in that
Matsushita--better known for its Panasonic brand--and
Toshiba said in a press conference that they will continue to purchase
LCD panels from Sharp, even after the newly formed venture begins
On the other end of the large flat-panel TV spectrum,
Matsushita earlier this year said it plans to build a plasma display
panel (PDP) plant in Amagasaki, Japan, that will produce 4.5 million
42-inch units a year.
The company leads in sales of PDP televisions in Japan,
followed by Hitachi, which has a joint venture with Fujitsu for PDP
production, and Pioneer.
Kotaro Yamagish of CNET Japan reported from Tokyo. CNET News.com's Richard Shim contributed to this report from San Francisco.