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December 26, 2007

Toshiba to Buy LCD Panels from Sharp

By Raju Shanbhag, TMCnet Contributing Editor

Toshiba (News - Alert) Corp is planning to buy large liquid crystal display (LCD) panels from Sharp Corp as part of an alliance in the flat panel business. Both the companies have stated that they will be holding a news conference later on Friday at 0930 GMT on an alliance in the LCD business, but did not elaborate further on this matter.




According to the agreement, there will be mutual supplies of core components for LCD TVs. Toshiba will provide its LCD TV SoC devices to Sharp from fiscal 2008, while Sharp will supply 40- to 60-inch LCD panels to Toshiba. Although not announced now, a report in Reuters reveals that this agreement may include stronger ties in image-processing chips, which Toshiba currently supplies to Sharp for use in its panels.

Reuters quoted The Nikkei business daily, which expects Toshiba to gradually reduce the amount of panels it procures from IPS Alpha Technology, a joint venture between Toshiba, Hitachi (News - Alert) Ltd and Matsushita Electric Industrial Co.

According to the industry sources, Toshiba is expecting Sharp to next-generation LCD panels at its new Sakai plant in the near future. That is one of the main reasons for the company to enter into this agreement. Also, Toshiba believes that Sharp's new 10G glass-based LCD panel meets the concept of Toshiba's future products in terms of not only image quality, but also in terms of lower power needs and a long life. The company believes that these panels have less harmful impact on the environment.

As Toshiba will also provide the LCD TV SoC devices to Sharp, the company believes that it would be icing on the cake if Sharp's LCD panels were combined with Toshiba's SoC. This agreement will also allow Toshiba to have a relook at its policy for OLED panel development. Earlier, the company planned to mass-produce 30-inch and larger OLED TVs in 2009. With this agreement in place, Toshiba can now concentrate more on small- and medium-size OLED panels mainly for mobile phone applications.

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Raju Shanbhag is a contributing editor for TMCnet. To see more of his articles, please visit his columnist page.

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