Quick Note: Sony and Sharp Call it Quits on LCD Joint Venture
May 25, 2012 1:22 PM
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Sharp Display Products to regain 100% control after sale
Sony and Sharp announced this week that their joint venture in producing and selling large-size LCD panels and modules will terminate. Sony will sell its shares in Sharp Display Products Corporation back to SDP. Sony owns about 7.04% of all stock issued in the company.
In exchange for selling the shares back to Sharp, Sony will get cash equal to its original investment of ¥10 billion.
The return of the stock and the cash payment to Sony will be completed by the end of June 2012. Sony made the original ¥10 billion investment in December of 2009, and at that point Sharp Display Products became a joint venture between Sharp and Sony.
Sharp expects no material impact on its financial forecast for the fiscal year ending March 31, 2013. Sony also expects no material impact on its own financial forecast set to end the same month.
Sharp Display Products already holds 92.96% of all stock in the company and purchasing Sony shares will bring its ownership up to 100%.
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5/25/2012 2:37:23 PM
There has been much speculation that Apple is highly interested in Sharp's IGZO process for it's high resolution iPad3 screen (as a means of increasing transmission efficiency, reducing the number of backlights, reducing the temperature, and reducing the size of the battery).
This sounds like a perfect opportunity for Apple to step in with a $1b of their own to secure a supply of these screens.
RE: Calling Apple?
5/26/2012 12:32:02 PM
Generally speaking, it's a bad idea for a company which sells finished products to own the parts manufacturers. It means you're beholden to one supplier for that part. If Apple owned part of Sharp's LCD production, they'd be financially obligated to use it even if it didn't produce the best panels.
Apple is better off doing what they do now. Scour the parts landscape for the best suppliers, and contract with them for a limited run of production. Next year, a different supplier may have better parts or a better price, and Apple is free to switch to them.
(Yes I'm aware Samsung contradicts what I just said. They're an exception though, and even they use some outsourced parts. Most finished product companies have switched to the outsourcing business model I just described. The days when Ford built every part of the car are long gone.)
"You can bet that Sony built a long-term business plan about being successful in Japan and that business plan is crumbling." -- Peter Moore, 24 hours before his Microsoft resignation
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