UPDATE 4-Sony to own one-third of Sharp's $3.5 bln LCD plant

(Adds Sony, Sharp presidents' comments)

By Kiyoshi Takenaka

TOKYO, Feb 26 (Reuters) - Sony Corp (6758.T: Quote, Profile, Research, Stock Buzz) said on Tuesday it would take a one-third stake in Sharp Corp's (6753.T: Quote, Profile, Research, Stock Buzz) $3.5 billion LCD panel plant set for completion by March 2010, to meet rising demand for flatscreen televisions.

It is the latest in a wave of alliances among Japanese flatscreen TV makers as they try to secure enough panels while keeping initial investments in check to fight steep price falls.

Sony wants a new panel supply source on top of its LCD venture with Samsung Electronics Co Ltd (005930.KS: Quote, Profile, Research, Stock Buzz), while the deal gives Sharp a partner that shoulders part of the hefty investment and helps keep the factory busy.

Sharp, which offers Aquos LCD TVs, plans to turn the liquid crystal display factory, which will be the world's largest, into a joint venture, with the Osaka-based company owning 66 percent and Sony the remainder.

Both companies declined to say how much they would invest.

"This agreement is a very big step for Sony as we strive to become the world's No.1 TV maker," Sony President Ryoji Chubachi told a news conference.

Sony and Sharp are the world's second- and third-largest LCD TV makers behind South Korea's Samsung, according to DisplaySearch data for 2007.