Canon, Matsushita and Hitachi Strike Billions Out Of LCD Business

LCD panels are present everywhere, from the portable gaming systems and cell phones to the wide display in the living room or the huge billboards on the American skyscrapers. The demand is so high that more and more manufacturers emerge in this sector and powerful alliances are continually forming to defend their supremacy.

One of the most recent alliance has been formed between industry giants Matsushita, the maker of Panasonic LCD TVs, Hitachi and Canon. It is not aimed at defending their market share, it is more of a deal that will bring billions of dollars.

Monday, in a press release, Hitachi, Canon and Matsushita announced that they would "merge their strengths to accelerate the development of cutting-edge display technologies and expand their scope of application". Their announcement also outlines the importance of joint-ventures to face increasing competition in the flat-panel industry. Moreover, other major players have paired to face market threats: Sony and Samsung have struck an alliance, and so did Sharp and Toshiba.

Canon and Matsushita have each acquired 24.9% of the shares in Hitachi Displays Co. Ltd, which will be transferred to each part until March 31, 2008. Hitachi will remain the major shareholder with a 50.2% stake in Hitachi Displays. This deal goes beyond the display business, as Matsushita and Canon have deepened their collaboration in another joint venture with Hitachi called IPS Alpha Technology Limited.

IPS stands for In-Plane Switching, a technology that was patented by Hitachi back in 1995. It broadens the viewing spectrum on the LCD display and, at the same time, offers better response speeds for colors and half tones.

The second phase of the deal will involve some ownership changes, as follows: Canon will take a majority holding in Hitachi Displays and Matsushita will take a majority stake in the newly formed joint-venture, IPS Alpha.