主题：【科技风云】平面电视 - SAMSUNG和SONY联手，对抗LG和PHLIPS -- 西风陶陶

Samsung, Sony Eye Flat Screen TV Joint Venture

Fri October 17, 2003 04:44 AM ET

By Yuko Inoue and Kim Miyoung

TOKYO/SEOUL (Reuters) - South Korea's Samsung Electronics Co Ltd said on Friday it was positively considering a joint venture with Japan's Sony Corp to make LCD (liquid crystal display) screens for televisions.

The deal would give Sony, the world's largest consumer electronics maker, a steady supply of flat screens for televisions and computers -- a key growth area for its struggling electronics division.

It would guarantee Samsung a large customer and increase the chances their screens would become the industry standard.

"But we have to make a final decision, hopefully in the next few days," Chu Woosik, vice president of investor relations at Samsung, said in a conference call.

The project will require a total investment of close to 200 billion yen ($1.8 billion), although this could change, a source close to the negotiations told Reuters.

"The talks are progressing well...and chances are high that the deal will be struck in the not-too-distant future," the source said.

Samsung, the world's second-largest maker of LCD panels, already plans to invest 20 trillion won ($17.06 billion) in new LCD production lines by 2010.

The world's largest maker of LCD panels is LG.Philips LCD, a joint venture between South Korea's LG Electronics and Dutch group Philips Electronics NC. LG.Philips LCD also plans to invest $2.6 billion in new flat screen production.

"It costs $3 billion to make a new LCD line and the cooperation is to share benefits and risks and to maximize synergies," Samsung's Chu told reporters.

"Cooperation will help us set a standard and secure a stable customer source for large-size TV panels in a very competitive market where size and standards matters."

GOOD FIT

Analysts say Samsung is a good fit with Sony's plan to clinch the top spot in the fast-growing market for flat-panel TVs, in which the Japanese firm has been lagging.

"Samsung would be the best choice, given its ability to supply a large amount of high-quality panels in a stable manner," said Masahiro Ono, an analyst at Credit Suisse First Boston.

Sony confirmed last month it had been in talks with several firms, including Samsung, about a possible tie-up in flat panels, but had made no decision.

Some analysts, however, expect the deal will benefit LCD component makers -- and their shares -- more than Sony, given the fierce competition among final product makers.

"Why buy Sony when I can buy the component makers? I don't need to. That logic appears to be working, at least today," said Marc Desmidt, head of Japanese equities at Merrill Lynch Investment Managers.

"They (Sony) have got tonnes of issues and one of them is the competition from Samsung," he said.

LCD parts and components maker Nitto Denko Corp was up 5.16 percent as of 0300 GMT on the news, while Nippon Sheet Glass rose 7.58 percent.

Japan's Nihon Keizai newspaper reported on Friday that the two firms are expected to sign an agreement as early as next week to set up a joint venture in South Korea to produce LCD panels for flat panel TVs.

The daily said the fifty-fifty joint venture would be capitalized at 200 billion yen.

Sony shares finished up 3.2 percent at 4,160 yen, outshining a 0.12-percent rise in the benchmark Nikkei average.

Shares of Samsung, Asia's most valuable technology stock with a market value of $62 billion, closed down 1.6 percent at 452,000 won after it announced a third-quarter net profit of 1.84 trillion won, beating analyst forecasts of 1.64 trillion won.

Sony is set to announce April-September results next Thursday and a give a business strategy briefing on October 28.

Sony barely eked out a group net profit in the first quarter, hurt by cooling demand for its PlayStation 2 game machines and slumping sales of its Trinitron televisions.

Group net profit for the April-June quarter tumbled 98 percent from the year before to 1.12 billion yen.

Unlike rivals Sharp Corp, Samsung and Matsushita Electric Industrial Co Ltd, Sony relies entirely on outside suppliers for LCD panels. But in May it said it wanted its own line of large TV-use LCD panels.

(Additional reporting by Nathan Layne)