In a surprise move, Toshiba is to purchase a 19.9 percent stake in LG.Philips’ Polish LCD plant, currently under construction. The 5.5th generation factory is expected to produce 3 million flatscreens annually for the European TV market, when it opens next year.
The new facility will concentrate on buildng large screen TVs and widescreen laptop and monitors.
Both vendors benefit significantly from the deal. For its stake, Toshiba will have access to a stream of competitively priced screens. Hit by big losses caused by falling panel prices, this strategic alliance will also mean a big cash injection for LG.Philips, which has just announced an operating loss of 404 million US dollars in the third quarter, compared to an operating profit of 254 million dollars this time last year.
Says Bon Joon Koo, CEO of LG.Philips, “During the third quarter, our business did not perform at the level we expected, primarily due to higher than anticipated price declines mainly for LCD TVs.”
The Japanese giant will invest approximately 5.5 billion yen. “Our partnership with LG.philips is an important step toward reinforcing Toshiba’s presence in the trans-European TV business,” said corporate senior executive vice president Toshio Yonezawa.
Toshiba is thought to be particularly interested in mass-producing LCD screens of 50-inches and more.