The LCD panels' market seems to be the hottest point of interest for the most important names in the CE industry these days and we're witnessing what could be very well history being written, as the major players in this field are teaming up, presumably to counter Samsung's iron-fisted market dominance. Thus, after Sharp and Toshiba announced their strategic partnership just before Christmas, three other Japanese companies, namely Hitachi, Canon and Matsushita, have just made official a long-rumored deal.

According to the joint statement issued by the three firms, they have reached a basic agreement on a comprehensive alliance aimed at reinforcing and growing the liquid crystal display ("LCD") panel businesses and technologies. Under this alliance, the three companies will merge their strengths to accelerate technological development and expand their scope of application.

Furthermore, Canon and Matsushita will, by transfer of shares from Hitachi, each acquire 24.9% of the shares of Hitachi Displays Co., Ltd. ("Hitachi Displays"), a wholly owned subsidiary of Hitachi engaged in small- and medium-sized LCD panel-related businesses, by March 31, 2008.

As mentioned earlier, this move follows a similar one announced by Sharp and Toshiba only a few days ago. Its main purpose is to increase the companies' presence and strength on the LCD panel market, but, as expected, each of the three parties involved has its own special agenda.

For example, Hitachi has decided to expand its business alliances with Canon and Matsushita in order to advance the development of advanced LCD panel technologies through collaborative creation with the respective companies, including here the further enhancement of Hitachi's famous IPS (in-plane switching) technology.

Canon, on the other hand, hopes to sharpen its product development capabilities by shortening development times and enhancing product features. It also aims to reinforce its digital single-lens reflex camera and various other product businesses employing high-quality, small- to medium-sized LCD panels in the consumer electronics, office equipment, medical and other fields. Furthermore, Canon aims to accelerate ongoing development of organic light-emitting diode ("OLED") displays by teaming up with Hitachi, which also boasts such advanced display technologies.

Last but not least, Matsushita, Panasonic's parent company, wants to further expand and strengthen its mainline PDP operations, the collaboration with the Hitachi Group ensuring a stable supply of liquid crystal displays by pushing ahead with construction of a next-generation plant at IPS Alpha. The aim is to exploit the performance and cost advantage of the IPS α Panel toward increasing the competitive edge of the VIErA Series of flat-panel TVs in step with PDP models.

Theoretically, this could be a win-win situation for all the parties involved, because everyone's getting what they need from the deal. However, there's another aspect that raises some concerns here, namely the fact that the Japanese are clearly quite worried about losing ground to the Korean and Taiwanese companies, who have managed to take the leading positions in almost all of the separate segments of the consumer electronics market.


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