Facts: Sony is planning to build 6 million LCD TVs this business year ending in March 2007. S-LCD, its joint venture with Samsung, will not be able to provide enough LCD TV panels to Sony and Sony is out to get hitched with some other panel manufacturer. Under current agreement with Samsung, Sony only gets 50% of S-LCD's production capacity.
Opinion: Although this might be a long shot, cooperative work between a Korean company and a Japanese company is not common. Sony and Samsung are two companies that are aggressively targeting LCD TV market share by significantly reducing prices. There has been reports that S-LCD is manufacturing special LCD TV panel versions exclusively for Samsung while supplying Sony with standard parts. If this is the case, it is cause of great concern for Sony. I don't see S-LCD staying around for too long. Samsung will most likely move toward buying Sony out. Sony will probably move toward a Sharp model where they will need to invest US$3-5 billion in a G8 fab in the very near future to compete with the likes of Samsung. Maybe with hefty profit margins from PS3 game titles, Sony might have enough cash to take a high-upside risk. Sharp's business is not all rosey either: because of a shortage in LCD TV panel supply in 2005, Sharp went from #1 in LCD TVs to quite a bit lower than that. Now, Sharp is procuring LCD TV panels from QDI, a company soon to be swallowed up by AUO. Personally, I wouldn't want to purchase a Sharp TV that has an AUO panel if I could buy the same TV with a Sharp panel.