Sony to buy LCD TV panels from Sharp: source

TOKYO (Reuters) - Sony Corp 6758.T is planning to start buying TV-use liquid crystal display (LCD) panels from Sharp Corp 6753.T as early as in the next business year that begins in April, a source close to the matter said on Saturday.

A photographer takes a photo of a Sharp LCD TV at a news conference in Tokyo August 22, 2007. Sony is planning to start buying TV-use LCD panels from Sharp as early as in the next business year that begins in April, a source close to the matter said on Saturday. REUTERS/Michael Caronna

Sony currently runs an LCD panel joint venture with Samsung Electronics Co Ltd 005930.KS, but procurement from Sharp is expected to help it secure enough panels to meet fast-growing LCD TV demand without heavy capital investments.

Samsung and Sony compete for the top spot in the global LCD TV market.

For Sharp, another major LCD TV maker, expanding a pool of customers for its LCD panels is important as it is ramping up its panel production capacity aggressively.

The Osaka-based company said last month it plans to boost output capacity at its latest panel plant by 50 percent by July.

Sharp is also building the world’s largest LCD panel factory, spending 380 billion yen ($3.55 billion). The plant is slated to come onstream by March 2010.

The Nikkei business daily said in its Saturday morning edition that Sony is in the final stages of talks with Sharp to buy large-sized LCD panels.

Sony aims to double LCD TV sales to about 20 million units in the business year starting April, and the volume of its panel procurement from Sharp will likely come to the equivalent of 3 to 5 million 40-inch-class panels in the following year, the Nikkei said.

A Sony spokesman and a Sharp spokeswoman declined to comment.

Global demand for LCD TVs is expected to more than double to 155 million units by 2012, the Japan Electronics and Information Technology Association said on Thursday.

In an effort to keep pace with strong sales growth, Japan's Toshiba Corp 6502.T said in December it would buy large LCD panels from Sharp, while Panasonic maker Matsushita Electric Industrial Co Ltd 6752.T announced earlier this month it would spend 300 billion yen to build an LCD panel plant by 2010.

Reporting by Kiyoshi Takenaka; Editing by Michael Urquhart