Sony to own one-third of Sharp's LCD plant

The move is the latest in a wave of alliances among Japanese flat TV makers as they try to secure enough panels while keeping initial investments in check to fight steep price declines.

Sharp, which offers Aquos LCD TVs, plans to turn the liquid crystal display factory, which would be the world's largest, into a joint venture, with the Osaka-based company owning 66 percent and Sony taking the remainder.

Besides LCD panels, the joint venture will also produce LCD modules, which are display panels equipped with components such as a backlight unit and LCD driver chips.

Sony and Sharp are the world's second- and third-largest LCD TV makers, behind South Korea's Samsung Electronics Co Ltd

The two Japanese companies plan to hold a joint news conference at 7 p.m. (0500 EST), where Sony President Ryoji Chubachi and Sharp President Mikio Katayama will speak.

"For Sharp, this is a positive step since it means a major buyer that would keep the 10th-generation factory busy," Daiwa Institute of Research analyst Kazuharu Miura said.

Sharp's new factory would use so-called 10th-generation glass substrates, which can yield more panels than earlier-generation, smaller glass substrates, improving production efficiency and helping both firms offer attractively priced flat TVs.

Global LCD TV sales are likely to more than double to 155 million units by 2012, according to the Japan Electronics and Information Technology Association.

"Sony needed an extra source of panels because the large-size LCD TV market is growing faster than it had expected. As Sony expands TV production, it is natural to seek to diversify panel sources," said Park Hyun, an analyst at Prudential Investment & Securities.