Sony may exit LCD deal with Samsung

Sony Corp, struggling with a loss-making television business, is in negotiations to pull out of its LCD joint venture with South Korea's Samsung Electronics in a bid to cut costs.

A report in the Nikkei business daily reported that Sony was aiming to reach an agreement to sell its nearly 50 percent stake in liquid-crystal display joint venture S-LCD to Samsung by the end of this year.

[caption id="attachment_119106" align="alignleft" width="380" caption="The Sony Bravia LCD television - hotbuzz.com"][/caption]

Sony intends to rely more on outsourcing to reduce procurement costs to cope with rapidly declining prices of LCD panels due to a global oversupply, the Nikkei said without citing sources.

A Samsung Electronics spokesman declined to comment and Sony officials were not reachable immediately.

South Korean newspaper Chosun Ilbo had a similar report on the joint venture breakup in July, which Sony denied.

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A well-informed industry source told Reuters in Seoul that such reports seem to be "distorted" because Sony has been negotiating with Samsung over its return on investment in the joint venture, rather than shareholdings.

Sony is under pressure to show it can reduce its exposure to the loss-making TV unit and concentrate on developing its strategy for smartphones.

Last week, it announced it will take control of its mobile phone joint venture with Ericsson as it seeks to exploit its music and video applications to help it catch smartphone leaders such as Apple Inc.

Sony has already sold off TV factories in Spain, Slovakia and Mexico in the past few years and outsources more than half of production to companies including Hon Hai Precision Industry. It retains four TV plants of its own in Japan, Brazil, China and Malaysia.

Reuters