Sanyo, Quanta to form flat TV joint venture
TOKYO/TAIPEI, Mar 17 (Reuters) Japan's Sanyo Electric Co. and Taiwan's Quanta Computer Inc. have agreed to set up a joint venture to make and sell flat TVs, the two companies said on Friday, in an effort to boost their presence in the fast-growing market.
Details of the new venture would be decided after due diligence, but the two said the new company will take over Sanyo's TV development and production facilities.
The announcement came after the Japanese and Taiwanese stock markets closed. But talk about the joint venture helped Sanyo shares to end the day up 2.7 per cent at 307 yen, while Quanta's shares were up 4.3 per cent at T.00.
The agreement is the latest in a series of restructuring efforts at Sanyo, which is facing mounting losses.
The Osaka-based firm embarked on a sweeping restructuring plan last year, saying it would cut 15 per cent of its group work force, close factories, halve its debt and streamline unprofitable business areas.
Nokia, the world's largest mobile phone maker, and Sanyo said earlier this year they plan to form a mobile phone joint venture, giving Sanyo a shot in the arm.
Sanyo makes 6.5 million TV sets a year, but most of them are traditional cathode ray tube (CRT) models.
The venture with Quanta Computer, which has a liquid crystal display (LCD) unit, Quanta Display Inc., is expected to help Sanyo secure a foothold in the flat-panel TV market.
''Sanyo can strengthen its brand-competitiveness by securing panels from Quanta Display to reduce costs. For Quanta Computer, it might win orders from Sanyo,'' Credit Suisse First Boston analyst Wanli Wang said in Taipei ahead of the announcement.
Sanyo had a 1.5 per cent share in the global LCD TV market in the final quarter of 2005 in unit terms, according to DisplaySearch.
That is far behind top LCD TV maker Sony Corp. 14.6 per cent and No.2 Philips's 14.2 per cent.
Sanyo said the new venture will handle plasma TVs as well as LCD models. It had a 0.3 per cent share in the plasma TV market in the last quarter of 2005.
REUTERS SD SSC1433