Sony taps Sharp for LCD panels

Sony Corp. reportedly plans to procure LCD panels from Sharp Corp. starting this year, diversifying its supply channels to accommodate increasing demand and reduce costs.

This is according to Trading Markets, which cited a Nikkei report as saying that Sony has entered final negotiations with Sharp regarding a long-term contract for large panels.

The agreement is expected to involve the latest 10G panels that Sharp plans to produce at its plant in Sakai, Osaka Prefecture, slated to start production in 2009. Sony may also purchase displays manufactured at Sharp's Kameyama plant in Mie Prefecture in fiscal 2008.

Nearly all of Sony's LCD panels are currently supplied by Samsung Electronics Co. and S-LCD Corp., with some smaller panels sourced from Taiwan.

Sony is tapping Sharp since its joint venture with Samsung and S-LCD does not have much room to increase output. But Sony plans to continue procurement from Samsung and S-LCD, as well as boost purchases from Taiwanese firms. By increasing the number of suppliers, Sony aims to lower costs.

In a separate report, Lee Sang-wan, Samsung LCD president, asserted that Samsung's partnership with Sony remains intact. The Digital ChosunIlbo said that Lee assured the South Korean company did not sever ties with Sony despite the reported long-term LCD contract the Japanese electronics firm signed with Sharp.