Despite having a joint venture with Samsung, Sony is set to source large Bravia LCD TV panels from Sharp in an effort to continue supply. During the recent holiday period Sony achieved 40% of the Australian LCD TV market according to GfK with the company now struggling to supply HD TVs particularly in larger sizes.
The Japanese business daily Nihon Keizai said on Saturday that Sony is in the final stages of talks with Sharp to buy LCD panels from the Japanese manufacturer. In the past Sony has sourced its LCDs from Samsung and S-LCD, a joint venture between the two firms.
Japanese media reports also claim that Sony is considering sourcing 40 to 50 inch panels from Sharp as opposed to manufacturers in Taiwan and China. In the past Sony has procured 60-70 percent of its LCDs from S-LCD and Samsung and the rest from Taiwanese makers.
Samsung said, “Sony’s tie-up with Sharp seems to be a part of a diversification strategy. The strategic partnership of Sony and Samsung has been and will be firm and stable.”
Upon news of the deal breaking executives and working-level employees of the Samsung Group and Samsung Electronics were called into emergency meetings spanning both Saturday and Sunday to analyse the situation.
Analysts say the ramifications could be serious for Samsung because the joint venture of Sony and Sharp is not a one-time contract to meet LCD shortages and that the relationship could grow into a joint venture between the two Japanese companies.
Some speculate that the protracted investigation into Samsung’s slush fund scandals and Japanese manufacturers’ move to outpace Korean counterparts led to the change.
An electronics industry source said, “Samsung’s management is in paralysis due to the investigation and for its part, Sony can no longer wait for Samsung (as an LCD supplier). Sony’s changes to several of its procurement sources are a minus for Samsung in the global market.”
A high-ranking employee of Samsung Japan said, “The Hinomaru initiative (Japanese electronics manufacturers ganging up on foreign counterparts) could be realized. It could deal a blow to Samsung.”
According to Display Search, the worldwide leader in display market research and consulting, Samsung led flat screen TV sales last year with 18.7 percent of the world market. Sony was second at 17.1 percent and Sharp third at 11.7 percent.