The consolidation process in Japan’s tech industry isn’t stopping. Pioneer and Sharp said today in Tokyo they have reached a basic agreement to launch an optical disc joint venture [JP, PDF], a move that is supposed to give the companies  a boost in the Blu-ray segment. Both companies said they are ready to completely transfer their optical disc businesses to the new entity.

The joint venture is expected to start operations October 1 this year, which could mean bad news for competitors such as Panasonic or Sony. Pioneer and Sharp will work together in designing, manufacturing and selling the discs themselves as well as the corresponding hardware.

The two companies are expected to sign contracts by June 25 this year. They don’t have much choice, as Sharp doubled their loss estimate for the past fical year and Pioneer got into trouble with its flat screen business. Holding 14%, Sharp is Pioneer’s main share holder.