Samsung is ending its alliance with Sony on their joint LCD venture as Sony has consistently suffered massive operating losses from its TV business. The termination of the venture comes two months after Sony officially requested Samsung to end the partnership in October. Samsung has agreed with Sony to buy its entire stake in the S-LCD joint venture for 1.08 trillion won ($939 million).The separation comes after Sony’s November announcement of a $2.2 billion annual loss in its TV division due to poor demand and a stronger yen. Since April 2004, Samsung and Sony have been operating two LCD-making facilities at Samsung’s manufacturing complex in Tangjeong, South Chungcheong Province.
Sony holds a 50-percent stake in S-LCD in an attempt to secure stable supplies of the key parts. The joint venture was mainly producing 40-inch LCDs for Samsung’s PAVV and Sony’s BRAVIA TVs. Sony, which reduced its TV-making plants to four from nine, is expanding its outsourcing to Taiwanese makers.
Despite the breakup, Samsung plans to maintain a strategic partnership with Sony in next-generation TVs such as those that use organic light-emitting diodes (OLED) as a backlight. Samsung is to supply large and medium-sized panels for televisions to Sony for a while, though Song declined to unveil further details citing the sensitivity of the issue.
