Loss Making Sony Set To Quit TV Deal With Samsung

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Sony who is yet to make a profit selling flat panel TVs is set to pull the plug on their TV manufacturing relationship with Samsung, with many observers claiming that Sony came off second best in the deal which was struck in 2004.The Japanese Company has confirmed they have entered talks to sell its stake in the joint liquid crystal display panel venture.In the year to March 2011, Sony posted an operating loss in its TV business division for the seventh consecutive year, with its accumulated loss exceeding $6 billion to date.

AP reports that Sony aims to reach an agreement with Samsung on the sale within this year but the talks could be complicated as the South Korean firm will be forced to secure a new buyer if the two companies part ways, Nikkei Japansaid.

As LCD panel prices continue to slide due to a supply glut, Sony is increasingly relying on other manufacturers for the key TV component as part of its cost-cutting efforts, the daily said.

In 2004, Sony and Samsung Electronics set up the joint venture, S-LCD Corp., as the two leading television makers wanted to secure a stable supply of LCD panels.

Samsung Electronics has a stake of 50 percent plus one share in the joint venture with Sony holding the remaining shares.

From 2004 to 2009, Sony spent a total of $1.8 billion to ramp up S-LCDs output capacity, Nikkei said.

The Japanese manufacturer purchases about half of the LCD panels produced by the joint venture.

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