Japan’s Sanyo Electric Co. Ltd. (OTC ADR: SANYY) has become the latest company to become part of the industry cadre that’s buying liquid-crystal display (LCD) panels from Sharp Corp. (OTC ADR: SHCAY) for use in flat-panel televisions.
Sanyo said it started procuring the display panels from Sharp in April, and would use them for the LCD TVs it’s producing for the North American market. And while Sanyo said it will keep buying LCD panels from other suppliers, too, the company also said that it’s in talks with Sharp about a program in which the two would jointly develop a line of kitchen appliances.
With its consumer-electronics business struggling, Sanyo has refocused itself strategically, betting its future on solar cells and rechargeable batteries, Reuters reported.
“We hope to expand our business by having a mutually complementary relationship with Sharp,” Sanyo spokeswoman Yuko Hosaka told Reuters. “Sharp’s strength in LCD (panels) is part of that.”
Sanyo sold about 1 million LCD TVs in North America in the business year that ended March 31.
Sharp’s Growing List of LCD Disciples
Sharp, which markets the Aquos line of LCD TVs, is the world’s third-largest maker of the flat-panel televisions, trailing South Korea’s Samsung Electronics Co. Ltd. (PINK: SSNLF) and Japanese consumer-electronics giant Sony Corp. (ADR: SNE). But Sharp has been trying to boost its market position and establish a consistent market for its LCD panels among rival flat-panel TV producers even as it invests to elevate its own productive capacity, Reutersreported.
As Money Morning reported back in February, Sony agreed to take a one-third stake in a $3.5 billion LCD plant that Sharp is building in Japan to meet the soaring worldwide demand for flat-screen television sets.
It plans to transform the LCD plant - which would be the world’s largest - into a joint venture: The Osaka-based Sharp will take a 66% stake, while Sony will take the remaining 34%.
While the companies would not say how much Sony would invest for its stake, Japan’s Nikkei newspaper said that Sony agreed to pony up $926 million, Bloomberg News reported. The factory will start production by March 2010.
While Samsung, Sony and Sharp rank one, two and three on the list of the world’s largest makers of LCD TVs, Japan’s Matsushita Electric Industrial Co. Ltd. - maker of the Panasonic brand - controls one-third of the plasma TV market.
Sanyo joins Sony, Toshiba Corp. (OTC: TOSBF) and Pioneer Corp (PINK: PNCOF) as companies that have all said that they plan to buy LCD panels from Sharp.
