Sony And Toshiba To Merge OLED And LCD Businesses

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The consolidation process in Japan’s electronics industry continues: Toshiba and Sony are in talks to combine their OLED and small LCD businesses, various Japanese news sources are reporting. The plan is to find synergies in the production for small LCD panels for smartphones, tablets and other mobile devices in order to catch up with Sharp, which currently holds the biggest share in the world market in this segment.

What’s interesting is that neither one of the companies but a government-backed investment fund will take a major stake in the new entity, which is expected to be established by the end of this year. That fund, Innovation Network Corp. of Japan, will likely control 70-80% of the entity, according to Japanese business daily The Nikkei (the rest will be shared between Sony and Toshiba).

Toshiba Mobile Display and Sony Mobile Display will cease to exist, and the yet to be named entity will compete with Sharp, the Hitachi-Foxconn alliance, and others in the global small LCD panel market.

Another interesting point is that the Sony-Toshiba move is aimed at getting both companies ready for a post-LCD future: the new entity is supposed to streamline all future R&D in OLED technology by the Sony and Toshiba. So far, big S and big T have been developing OLEDs separately, but they are far behind Samsung, the current global leader in that market.