Sony will sell its shares in the LCD panel joint-venture S-LCD to partner Samsung, the two companies have announced, in a deal worth $940m, as the Japanese firm struggles to coax profit out of its TV line. S-LCD Corporation had been established in 2004 by Sony and Samsung, with this new deal – that will leave S-LCD a wholly owned Samsung subsidiary – expected to close by the end of January 2012. Sony will continue to source displays for some of its TVs from S-LCD.
“This transaction will enable [Sony] to monetize its shares in S-LCD and aims to secure a flexible and steady supply of LCD panels from Samsung, based on market prices and without the responsibility and costs of operating a manufacturing facility” the Japanese company says. As for Samsung, it “anticipates heightened flexibility, speed and efficiency in both panel production and business operations.”
The deal is another step in Sony’s attempts to bring its large-format LCD business into profit, the TV division proving to be a significant money pit in recent quarters. Back in November, Sony warned of losses of around $1.15bn, with under-performance in the TV segment a sizable contributor to that.
Initial goals of LCD production, Sony explained, had been set when there was a shortage of panels and the belief that demand would continue to grow. Both those factors proved unreliable, leaving Sony with a wasteful production setup. The company announced plans to divide the LCD business into three, one section handling the legacy LCD TV business (using Sony-designed and produced components), another the ODM business (using third-party components) and finally a group that would be responsible for “developing and designing the next generation TV.”
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Samsung buys out Sony S-LCD share in $940m TV deal is written by Chris Davies & originally posted on SlashGear.
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