Companies such as Hitachi, Sony and Toshiba have announced that they will be taking part in a joint venture to research and create tablet computers and smartphones that utilise LCD displays in order to lower manufacturing and retail costs. The venture will be investing into the LCD business thanks to funding from the Japanese government.
It has been suggested that the Japanese government is interested in the venture in order to compete with the rival economies of both South Korea and Taiwan. However, many companies have been hesitant to invest in LCD as it is expected that prices and demand for the technology will drop. This is despite the current high demand for gadgets such as smartphones and tablet PCs.
Some industry professionals have suggested that the current demand levels will drop and manufacturers such as Sony will be left with high levels of stock that they can’t sell. Commenting on this Shigeo Sugawara from Sompo Japan Nippon Koa Asset Management said: “We will probably see oversupply in the near future. It’s not a business that will likely provide stable profits in the mid- to long-term.”
However despite the joint venture seeming initially positive there are concerns that thanks to the many different components and technology used in their products, there may be difficulties bringing these plans to fruition. Additionally, the firms have not yet signed legally binding contracts but simply a memorandum of understanding. That said the companies involved have stated that they aim to sign legal contracts later on in this year.