Taiwanese LCD TV Makers May Benefit from Undermined Partnership between Sony and Samsung

Jan 02, 2012 Ι Industry In-Focus Ι Electronics and Computers Ι By Steve Chuang, CENS
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Taipei, Jan. 2, 2012 (CENS)--With Japan's Sony and Korea's Samsung Electronics dissolving their joint venture in LCD panel production, Taiwan's LCD TV manufacturers are expected to see more orders from the Japanese customer in the short term, forecast Rock Hsu, chairman of Compal Electronics Inc., a globally large-sized contract manufacturer of electronics.

Sony, once the world's leading supplier of CRT (cathode ray tube) TVs, has been outdone by its competitors, especially Samsung and LG, in the LCD TV market, hence suffering losses in its TV business in the past years. To stanch the losses partly by building an economical supply of LCD panels, the Japanese company decided to join hands with Samsung Electronics on a joint venture, called S-LCD, in 2004.

However, the joint venture seems unable to provide as good benefits as Sony expected, as the Japanese company's TV operation has remained unprofitable for seven consecutive years since then, in a sharp contrast to that of Samsung Electronics, which has emerged as one of the world's top three LCD TV suppliers now. As a result, the two sides have recently decided to dissolve the joint venture, with Samsung Electronics to buy up S-LCD's shares held by Sony.

Hsu indicated that Sony's withdrawal from the joint venture, which has indicated its undermined partnership with Samsung Electronics, will likely prompt the former to increase purchases from its Taiwanese contract manufacturers to benefit Taiwan's LCD TV industry in the future, considering that the Japanese customer has built solid business ties with Taiwan's ICT (information and communication technology) industry.

Starting with display panel makers as AU Optronics Corp. and Chimei Innolux Corp., a number of TV assemblers, such as Hon Hai Precision Industry Co., Ltd., Compal, and Wistron, LED-backlit module suppliers as Everlight Electronics Co., Ltd. and Epistar Corp., and IC chipset designers like MediaTek Inc. are regarded likely to garner more contract orders from Sony to boost their presence in the customer's supply chain in the short term.
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