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Electronics giants Sony and Sharp have shaken hands on a deal that’ll see both companies invest in a factory designed to punch out cutting-edge LCD panels.

The pair will form a jointly owned subsidiary which is set to be up and running by the end of the April 2009. The JV will use a Sharp LCD panel production factory, which is currently under construction in Sakai City, Japan, to produce tenth-generation glass substrates.

These substrates, which measure 3 x 2m, are 60 per cent larger than eighth-gen substrates, can be cut up to produce various sizes of LCD panels, such as six 60in displays.

It's all about dealing with the increased cost of LCD panel production driven by the need to produce ever larger substrates to cope not only with bigger TV sizes, but to maximise the efficiency of the production process.

Panels from the factory will be supplied to both companies according to the size of their respective investments, 66 per cent of which will come from Sharp and the remaining 34 per cent from Sony. The factory’s expected to produce about 36,000 panels per month when production begins, but this could later shoot up to 72,000 panels once things get going.

The combined size of the financial investment hasn’t been disclosed, but Sony’s chunk will be in addition to a ¥22bn (£105m/€140m/$205m) investment that it’s already budgeted for OLED panel production over the coming years.

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