Sharp, Sony to expand LCD TV alliance: report

TOKYO (Reuters) - Japan's Sharp Corp will begin supplying light-emitting diode backlights for LCD televisions to Sony Corp, expanding their alliance in LCD panels, the Nikkei business daily said on Tuesday.

The two will also jointly develop next-generation backlights, it said without citing sources.

TVs that use light-emitting diode (LED) backlights are expected to be a major battle ground for consumer electronics makers, and such move would likely improve their competitiveness against industry leader Samsung Electronics Co Ltd.

LCD TVs that use LEDs rather than traditional cold cathode fluorescent lamps, are thinner and offer better picture quality.

Both firms declined to comment on the report, saying they do not provide information about supply transactions for individual parts.

Sony plans to invest about 68 billion yen by April 2011 to take a one-third stake in a joint venture with Sharp to jointly produce LCD panels at a cutting-edge plant in western Japan.

The plant, which started output last month, is the world's first factory that processes so-called 10th-generation glass substrates, which are bigger than earlier-generation substrates and help reduce per-panel output costs.

Shares in Sharp rose 2.6 percent to 1,035 yen, while Sony gained 0.2 percent to 2,535 yen, outperforming the Tokyo stock market's electrical machinery index, which slipped 0.5 percent.

(Reporting by Mayumi Negishi and Kiyoshi Takenaka; Editing by Edwina Gibbs)