Toshiba sells Mexican LCD plant for peanuts

Just as Hitachi, Toshiba and Sony merge to create a monster in LCD, Toshiba is selling off one of its Central American plants in Mexico – to a bidder and friend in Taiwan’s Compal.

Compal is trying to move away from its total reliance on laptop display contracts as demand slips.

That’s why then, Compal has bought Toshiba’s TV production facility for peanuts. The word according to Taiwan Economic News is Toshiba was keen to sell the factory. It’s expected the deal sat between the $10 million and $17 million mark. It also signals an eagerness to take business from under the feet of successful Korean manufacturers like LG and Samsung.

Compal and Toshiba will hope to cut out the middleman and rubbish unnecessary costs. Toshiba is already one of Compal’s most important LCD TV contract buyers, making up half of Compal’s orders altogether, says CENS. 

Other, possibly attractive reasons for the buy are its relative closeness to the United States and easy passage into South America.

Meanwhile, as laptop demand falls, Compal wants to spread the revenue elsewhere in its company.

With a projection to ship eight million LCD TVs before the year’s end, and an operation boost from eight percent to 10 percent, it’s a deal between friends to maintain stability while stepping on the toes of that other Taiwanese rival, Wistron.