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.
The wide-ranging collaboration and cooperation announced Tuesday is the first step of a series of planned moves that will eventually have Canon take control of Hitachi Displays and Panasonic take control of IPS Alpha Technology, the three companies said.
In addition to the LCD alliance, Canon and Hitachi plan to work together on development of OLED (organic light emitting diode) displays. OLED is a fundamentally different technology from LCD and PDP and has been under development by many display makers for several years. It's viewed by some as a potential replacement for LCD technology because it provides a brighter and richer picture but a lot of work remains before it can be produced in sufficient volume and at a low enough price to compete with LCD.
The world's first commercial OLED TV recently went on sale in Japan. Sony's XEL-1 has an 11-inch screen and is just 3-millimeters thick - another advantage of OLED because a backlight unit isn't required - but comes with an equally impressive ¥200,000 (£885; US$1,750) price tag.
Last week Toshiba and Sharp announced plans to work together in the flat-panel display business. Toshiba will buy from Sharp screens for its 32-inch and larger TV sets while Sharp will buy from Toshiba the chips used in its TVs. The cooperation will begin from April next year and will slowly build towards 2010 when two goals are expected to be reached: Sharp will supply Toshiba with 40 percent of its LCD modules and Toshiba will sell to Sharp 50 percent of the chips it needs, they said.
Sony and Samsung Electronics have been cooperating in LCD panel production for sometime and jointly own S-LCD, a manufacturer of cutting-edge LCD panels based in South Korea.