Sony and Epson in alliance to make small LCDs

Chicago (IL) – The recession is
hurting the small-factor LCD business for
Sony and Seiko Epsonas both
companies announced today they expect huge losses this year. In an effort
to reorganize and restructure their ailing LCD businesses,
the two companies are now in talks about a possible partnership that
would see them join forces to manufacture small LCD displays, sharing their respective technologies.

The talks about a possible alliance between the two companies would allow them to joint-manufacture the small-factor LCDs used in
cellphones and mobile gadgets. This possible co-operation would enable
the two companies to offset declines being felt hard in that industry. Both Sony’s and Epson’s LCD businesses are bleeding amidst declining orders, which is ultimately caused by decreases in consumer spending.

Epson confirmed yesterday that it would close one LCD
manufacturing facility. And both companies have shocked
investors with huge loss forecasts for this year. Epson said it expects
a net loss of 100 billion yen (or US$1 billion), while Sony estimated this
year’s net loss to 150
billion yen (US$1.5 billion).

Specific terms of the LCD deal
are still on the table and open for discussion is taking place, but both companies
confirmed they expect to reach an agreement by the end of June at the
latest. The partnership would see Epson further cut its own LCD output
by transferring some of its business to Sony. In turn, Sony would gain access to Epson’s LCD technology which will be used across
Sony’s Mobile Display unit, while Epson Imaging could push its TFT
(thin-film transistor) technology across Sony products.