Sony ups reliance on LG for LCD screens

Japanese consumer electronics giant buying more LCD screens from LG, following end of display partnership with Samsung in bid to curb losses in its TV set business.
Written by Jamie Yap, Contributor
A correction was made to this story. Read below for details.

Japanese electronics giant Sony has increased its dependence on liquid crystal display (LCD) screens from Korean company LG, following a split from a previous partnership with Samsung Electronics in October last year.

LG Display is shipping more film-based 3D screens to Sony which are used in the latter's Bravia television sets, LG sources told The Korean Times in a report Tuesday. The LG-Sony collaboration comes as the penetration rate of LG's film-based 3D panels is projected to grow by more than 50 percent, the report said.

It added that the partnership indicated Sony's switch from relying on Samsung, and its battery-powered 3D technology, to LG which is pushing its cheaper film-based 3D technology, undercutting its Korean rival Samsung.

Sony terminated its previous LCD joint venture with Samsung in a bid to boost its loss-making TV business, as prices of LCDs dropped due to Japan's move to digital terrestrial broadcast which stifled demand for TV sets. Sony sold back its stake to Samsung in October last year, ending the partnership.

According to The Korean Times report, LG is doubling production to fulfil Sony's LCD panel needs. "Considering Sony's aggressive drive for outsourcing in flat screens, LG will likely receive more orders," an unnamed LG source told the Korean newspaper. "It is better-positioned for product commitment, on-time delivery and pricing, than Taiwanese flat-screen suppliers."

LG Display said it expects global demand for 3D televisions to surpass 40 million by the end of this year and is increasing investment to boost the output of its premium flat screens, buoyed by its business partnership with Sony. The company's panels have been adopted by Toshiba, Philips, Vizio and leading Chinese TV manufacturers, it added. The LG executive was quoted to say: "Major Japanese TV companies such as Panasonic displayed their latest 3D TVs, using LG's film-based 3D technology at the recent technology exhibition in Las Vegas [Consumer Electronics Show]."

He also revealed that organic-light-emitting diode (OLED) panels were the next major revenue source. LG Display will invest some 400 billion won (US$356 million) this year to mass-produce OLED displays to replace the current industry mainstay LCDs, which is likely commence from 2014, he said.

"As Sony has already put LG Display on a list of key suppliers, future talks will cover its OLED panel outsourcing from the latter half of this year," said the executive who, however, declined to comment on whether LG would supply OLED panels to Sony.

Correction: The Korean Times article was later updated to reflect a change in the spokesperson quoted. It cited "LG sources" rather than LG CFO Jeong Ho-young. LG also sent ZDNet Asia an e-mail to say it could not confirm statements made in the article, adding that it was unable to comment on any information regarding its customers.
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