S-LCD is no more, as Sony sells 50% shares for $949M

The joint LCD screen production venture between Samsung and Sony dissolves, as Sony suffers losses

Financial trends and news by Nathan Pensky
December 26, 2011
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The LCD screen joint venture between Sony Corporation and Samsung Electronics Company, called S-LCD, is no more, as the two companies announced Monday that Samsung had bought Sony's shares for $939 million. Sony had previously owned 50% of S-LCD.

Leading up to the dissolving of the venture, Sony had experienced losses for four straight years. Sony CEO Howard Stringer has indicated that the company has made $8.4 billion in acquisitions in 2011 to try and right the company, with most of those purchases geared toward its mobile-device manufacturing.

Sony is currently valued at $18 billion, as compared to $100 billion in 2000. This year, the company ranks No. 3 in global production of TVs, behind Samsung and another South Korean company LG Electronics. 

The venture between Sony and Samsung was formed in 2004, with LCD screen factories in both Japan and South Korea. The company expanded in 2008, opening facilities in Mexico. At that time, S-LCD produced 150,000 LCD screens monthly, for Sony and Sumsung mobile phones and TVs.

Sony has indicated that it will continue to participate in "engineering efforts in LCD panel technology" for S-LCD, as well as source Samsung for LCD screens, though the specifics of this latter arrangement were rather vague. Sony mentioned that it would take an $846 million loss in its Q3 reports, due to this sale, but that "the current estimate of the yearly savings in respect of such costs" would be a positive "compared to LCD panel procurement costs estimated."

The company is unsure how the dissolving of the venture would affect year-end profitability as a whole, though in November it had projected its losses would come close to $1 billion by the end of the fiscal year in April.

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