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Sony may break up with Samsung

Japanese firm considers ending LCD joint venture

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Sony is considering breaking up its joint venture with Samsung on LCD panels so it can cut its costs, according to a number of reports.

Sources familiar with the matter were chatting with Nikkei and Reuters to say that the Japanese firm was hoping to strike a deal by the end of this year to sell its stake, which is nearly half, in the joint venture S-LCD to Samsung.

A canned statement from the company said: "Sony has made no announcement in this regard and has no comment".

Sony made almost the exact same statement regarding the first media reports that it was considering buying out Ericsson's share of Sony Ericsson, a deal it then announced about three weeks later.

However, one source did tell Reuters that it was possibly just run-of-the-mill talks between Sony and Samsung on the joint venture's returns.

"Under the contract on the LCD joint venture, the two parties are allowed to discuss such matters, which outsiders could misunderstand as a step for Sony to withdraw from the joint venture," the source said.

A Samsung spokesperson had not responded to a request for comment at the time of publication.

TVs are not electronics firms' favourite product at the moment, as demand is slow and there's too much supply. If Sony pulled out of making its own panels, it could outsource them instead, potentially reducing its costs.

The Japanese company is due to announce its results on Wednesday and analysts are forecasting that it won't meet its operating profit forecast of 200 billion yen (£1.6bn) as, like local rival Panasonic, it struggles against weak demand and a strong yen. ®

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