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LCD maker merger mission

Hitachi, Canon, Panasonic tie in flat-panel displays

Hitachi, Canon and Panasonic have agreed to a wide-ranging collaboration that will see the three companies share the cost, burden and benefits of development and production of flat-panel displays.

The move comes hot on the heels of a tie-up announced last week between Toshiba and Sharp and continues a major realignment in the fast-moving industry.

Under the terms of the initial agreement Canon and Panasonic will each buy a 24.9 percent stake in Hitachi Displays, a wholly owned subsidiary of Hitachi that already makes small and medium size LCD (liquid crystal display) panels. The transaction, which is subject to regulatory approval, is expected to be completed before March 31, 2008.

Hitachi said it hopes to accelerate the development of cutting-edge LCD technology through the alliance, which was announced on Tuesday. Competition in the flat-panel display industry is fierce and there is constant pressure on manufacturers to invest in new and efficient production technology to keep prices low and their screens technologically competitive. However a new LCD plant can easily cost US$1 billion or more so companies are increasingly working together to share the costs.

Meanwhile Canon said it hopes to shorten development time and gain a stable supply of LCD panels for its range of digital single-lens reflex cameras. It also hopes to develop new types of displays that can be used in its information management products.

Panasonic, which has invested heavily in PDP (plasma display panel) technology for large-size flat-panel TVs and displays, will invest in a new production line at IPS Alpha Technology. The company is a joint-venture in which Canon and Toshiba also hold stakes although Toshiba is understood to be in talks concerning its exit from the venture. The new production line will help ensure a stable supply of medium-size LCD panels for Panasonic's TV up to about 40-inches in screen size, above which it uses PDPs.

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