Samsung Buys Sony’s Share In LCD Panel Venture
In 2004, Sony Corp. and Samsung Electronics Co. entered a joint venture for making LCD panels. Back then, the demand for consumer electronics was high and the joint venture was a profitable deal. But in 2008, when the economy fell, the demand for consumer electronics also decreased. Sony lost millions selling LCD panels and now they’re ready to leave that all behind and start anew.
Sony sold their stake in LCD panels to Samsung for 1.08 trillion won ($935 million) in cash for Sony’s stake in S-LCD Corp.
“Under the agreement, Samsung will acquire all of Sony’s shares of S-LCD Corporation, the two companies’ LCD panel manufacturing joint venture, making S-LCD a wholly owned subsidiary of Samsung,” Samsung Electronics said in a statement.
But this doesn’t mean that Sony will abandon their dreams for LCD panels. Sony will still get their LCD panels from Samsung, but without having to operate a manufacturing facility.
“In order to respond to such challenging conditions and to strengthen their respective market competitiveness, the two companies have agreed to shift to a new LCD panel business alliance,” Samsung said.
According to Sony, this deal, as well as future agreements, will enable them 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.
“Despite this one-time loss, Sony estimates that the transaction will result in substantial savings,” starting January, Sony said in a statement.
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