One of the most spectacular transaction on IT market takes place just days before the end of the year: Sony announced today that sold Samsung its stake of S-LCD, a joint venture between two companies started seven years ago. S-LCD Corporation was founded in 2004 as a joint venture between Sony and Samsung, with the Korean manufacturer having two additional shares in order to have control of the new business. The company’s goal was to ensure a steady supply of components for the two manufacturers.
Sony decision was motivated by the company’s strategy of outsourcing production of flat screens for televisions, a measure taken by the Japanese manufacturer to reduce its $2.2 billion loss recorded on the TV segment, due to the weak market demand and the appreciation of the Japanese currency. The almost 50 percent owned by Sony in S-LCD joint venture were estimated at 940 million dollars. This is the fourth consecutive year in which the Japanese manufacturer, number three on the flat-screen TV segment will suffer losses.
Analysts believe the move is positive for Sony, even though it was late, but it’s not advantageous for Samsung. The reason? The Japanese company could buy LCDs screens from manufacturers in Taiwan, if they will offer lower prices, and Samsung – the leading manufacturer of LCD screens worldwide, which is currently in the process of transition to a new generation of TV screens – could remain without a major customer.
Once a symbol of Japanese technology, Sony has sold in recent years the television production units in Spain, Slovakia and Mexico and turned to outsourcing for more than half of the components. Currently, the company has four production sites in Japan, Brazil, China and Malaysia.
