Hitachi, Toshiba and Sony to merge LCD business

The company which sounds like a sneeze, Hitachi, is chatting to Toshiba and Sony about merging their liquid-crystal display (LCD) units.

According to Reuters the moves follow similar talks with Hon Hai which are running aground.

If Hitachi pulls it off, it would create the world’s largest maker of small panels – and besides, it is an alliance with Japanese companies rather than barbarians.

The deal would attract funding from the government-funded Innovation Network of Japan which is expected to pony up $2.5 billion in the merged unit, Reuters‘ source claimed.

In return the government fund would likely gain a 70 percent stake for that amount and the three companies would then split the remaining interest. The plan would be to list the super-company in the future.

Toshiba and Sony have been planning to merge subsidiaries, making the panels in a bid to see off competition from other Asian rivals like Samsung.

Hitachi has had enough of the volatile panel business, which requires regular large-scale investment to keep up with cut-throat price competition.

Already Sharp, which is the world’s largest maker of small LCD panels, said this month it would switch most production at one of its TV panel plants to small panels.