The popularity of outsourcing LCD panel production between manufacturers is growing, with LG now confirming that it plans to buy 32in and 52in LCD panels from Sharp.

LG will initially buy 2m 32in panels from Sharp and then follow-up by buying an unspecified number of 52in panels from the same supplier at a later date.

LG is currently the world’s second-largest LCD panel producer, after Samsung, and the South Korean company claimed the agreement with Sharp will help its LG Display arm to "achieve this year’s sales target of some 14m LCD TV sets through stable procurement channels".

Why LG’s opted to buy just 32in and 52in panels from Sharp remains unclear. However, LG said it couldn’t consider a similar arrangement with Samsung because of market rivalry. So Sharp’s lower ranking clearly makes it a more realistic LCD panel source in LG’s eyes.

In a recent report, market watcher DisplaySearch stated that Q3 2007 saw LCD TV outsourcing reach 23 per cent of all LCD TV production, and it expects that figure to grow to 35 per cent this year.

Sharp seems to be a popular choice for LCD panels. Last month, Sony signed an investment deal with the company to produce tenth-generation LCD panels.

Pioneer recently canned its entire plasma production operation in favour of outsourcing, but it already buys LCD panels from Sharp.