S-LCD Co., the joint venture for making LCDs for TVs between Sony and Samsung, will soon be history. The Japanese company today announced it will exit the 50-50 venture by selling its share to the Korean rival for US$940 million, after seven years of collaboration.
After inking a final agreement, Samsung is ready to absorb the South Korea-based joint venture into its existing LCD business and turn it into a 100% subsidiary. Samsung’s LCD business will then be the second-largest in the world by revenue, trailing only LG Display.
Sony, which has been reporting losses for its TV unit for years, said that parting ways with Samsung will result in savings of about US$640 million every year. Last month, Sony issued a financial report forecasting a US$1.15 billion loss for this fiscal (for the company as a whole), but it didn’t say if the forecast will be revised.
To some extent, Sony and Samsung are continuing to collaborate in the display area. The Japanese company, which will keep on producing TVs, says it “entered into a new strategic agreement for the supply and purchase of LCD panels with a goal of enhancing the competitiveness of both companies”.