May 21, 2010 / 8:22 AM / 9 years ago

Sony, Samsung meeting seen focusing on LCD panels

TOKYO/SEOUL (Reuters) - A meeting on Monday between the top brass of Samsung Electronics Co and Sony Corp will likely focus on further cooperation in LCD panels, with the Japanese electronics maker facing tight supplies in the sector.

Securing stable panel supply is important for Sony, which already runs a panel-making joint venture with Samsung, to turn its TV business profitable for the first time in seven years this year and to keep it that way.

Global LCD TV demand will likely grow 24 percent to 180 million units this year, according to research firm DisplaySearch, with sales boosted by appetite in emerging markets.

“Sony has seen its TV sales growing this year ... (It and Samsung) need to discuss the next step,” said Park Hyun, an analyst at Prudential Investment & Securities in Seoul.

Sony aims to boost its Bravia flat TV sales by 60 percent to 25 million units in the year to March 2011.

The meeting between Samsung Chairman Lee Kun-hee and Sony Chief Executive Howard Stringer comes on the heels of Samsung’s announcement that it plans to invest a record $16 billion this year on boosting its output of microchips and display panels.

Possible cooperation could come in the form of Sony procuring panels or even microchips from the planned extra capacity at Samsung, or the two companies agreeing to expand output capacity at their display panel joint venture, S-LCD, analysts said.

Samsung is the world’s largest LCD TV maker, controlling 23 percent of the global market in 2009, according DisplaySearch, followed by Sony with 14.1 percent, and LG Electronics Inc with 11.3 percent.

“Quite a few people wonder how Sony can ever beat Samsung by using the same panels as its rival. But Sony is trying to attach its own added value to TVs through its network operations,” Mizuho Investors Securities analyst Nobuo Kurahashi said in Tokyo.

“On the other hand, Samsung could solidify its No.1 position as long as Sony uses the same panels and as long as it maintains the upper hand in panel output and supplies. So, it could be a mutually beneficial alliance.”

GOING ONLINE

Sony holds high hopes the online distribution of music, games, movies and book content through TVs and other hardware that are connected to the web will unleash its growth potential as a rare conglomerate holding a leading position in both electronics and entertainment industries.

In a major step in that direction, Sony on Thursday said it had joined hands with Google Inc and Intel Corp to offer “Sony Internet TV”, which marries the Web to television.

Samsung, the No.1 maker of memory chips and LCD panels, this week said its reinstated chairman Lee Kun-hee would meet Sony’s Stringer on May 24 in Seoul, without elaborating on the topics set for discussion. Sony declined to comment on the meeting.

South Korean media said Sony Executive Deputy President Hiroshi Yoshioka, Samsung CEO Choi Geesung and its chairman’s son and COO Jay Y. Lee would also attend the meeting to discuss smooth panel supply for Sony as well as cooperation in 3D TVs.

For Samsung, cooperation with Sony in 3D content would be beneficial given the Japanese maker’s strength in content and games as the South Korean company has a long way to go to beef up its content and software offering for phones and Web TVs.

Shares in Sony closed up 0.6 percent at 2,884 yen, outperforming the Tokyo stock market’s electrical machinery index, which fell 1.9 percent.

Reporting by Rhee So-eui in Seoul, Kiyoshi Takenaka in Tokyo

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