Toshiba®, Hitachi®, and Sony® shake hands in an LCD Merger
Electronic market has been facing an eye for an eye competition for quite some time now. Combating the rivals to strive for fame has become the ardent need of all electronics manufacturers, worldwide. Especially in Asia where to fend off growing competition from countries like Korea and Taiwan, three of the biggest electronics products manufacturers namely Toshiba, Hitachi, and Sony have merged their liquid crystal display (LCD) operations.
Toshiba Chief Executive Norio Sasaki, Hitachi President Hiroaki Nakanishi, and Sony Executive Deputy President Hiroshi Yoshioka shook hands for a joint venture of forging an LCD in Tokyo. The three companies hope to complete the merger in another one year. The location for the establishment of the production hub is yet to be decided on.
Innovation Network Corp. of Japan (INCJ) is aiding with investment to the new entity, known as 'Japan Display K.K'. This is expected to cover 20% of economy in the global market for panels used in digital gadgets. The INCJ will give it a 70% stake and invest about 200 billion yen, or approximately $2.6 billion by purchasing new shares.
This merger comes as a boon to the economic conditions of Japan, at the juncture when the yen is gradually recovering the impacts of economic slowdown of the recent past.
Kimikazu Noumi, president and chief executive of the INCJ, opined about the new joint venture that it’s being set-up “to ensure that Japanese companies can maintain their competitive edge in the LCD panel space.” The respective failures of the three companies in the large panel segment also led them to collectively invest in smaller LCD panels. The companies think that such a venture is less likely to fall victim to uncertain economic fluctuations. The market is expected to continue showing a growth in the demand for small and midsize LCD to an annual rate of 21%. This is also a mean by which Japan can attempt to rise up to the shoulders of South Korea and Taiwan.