Japan's Sharp, Toshiba Team Up in Flat Televisions

Japanese electronics makers Sharp Corp. and Toshiba Corp. said last week they will join forces in flat-panel televisions, stepping up efforts to fend off increasingly fierce global competition. The two companies have agreed to collaborate closely to meld Sharp's technologies in liquid crystal displays with Toshiba's expertise in image-processing chips, which are becoming ever more vital for advanced TVs.

Manufacturers are waging a "heated battle" in the global flat TV market, making it harder for one company to cope on its own, Toshiba president Atsutoshi Nishida said. Under the alliance, which is due to begin in the fiscal year from next April, Toshiba will buy large quantities of LCD panels from Sharp for use in its Regza-brand televisions with screen sizes of more than 32 inches. For its part, Sharp will buy semiconductors from Toshiba to use in its Aquos-brand LCD TVs.

The announcement came just a day after Sharp said it had become the top shareholder in troubled rival Pioneer Corp. By the year to March 2011, Toshiba plans to source 40% of its LCD modules from Sharp. Toshiba currently buys LCD panels from IPS Alpha Technology Ltd, which it jointly owns with Matsushita Electric Industrial Co and Hitachi Ltd, as well as from South Korea's LG Electronics Inc.

Sharp is a pioneer of LCD screens, having launched one of the world's first LCD pocket calculators in 1973. The company has seen four straight years of record profits as consumers dump their bulky traditional-style TVs for sleek flat panel ones. It is now building a new LCD panel and TV plant in Sakai city, Osaka prefecture, western Japan, at a cost of 380 billion yen (US$3.4 billion).

Toshiba meanwhile is focusing increasingly on computer chips. In October the group said it had reached a basic deal to buy Sony Corp's advanced semiconductor business. Toshiba has also expanded in the energy industry, buying Westinghouse Electric last year.

Japan's electronics industry is undergoing a major realignment as companies restructure in response to growing competition both domestically and from rival firms in countries such as South Korea and Taiwan.