Toshiba and Sharp are fierce competitors. Both based in Japan, they manufacture and sell flatscreen LCD TVs, among many other things. They've decided to cooperate with one another, and have announced that Toshiba will purchase LCD panels over 32 inches from Sharp, and in turn Sharp will purchase chips for use in their TVs from Toshiba.
Toshiba President Atsutoshi Nishida said the partnership will create a "win-win relationship" combining the strong LCDs of Sharp with the strong semiconductors of Toshiba.
``To survive the tough competition, we need to be strong in both the key device of panels and the technology of system LSIs,'' he told reporters, referring to the sophisticated chips increasingly used in digital consumer goods that are Toshiba's forte. ``It is difficult for one company to handle both.''
Toshiba and Sharp will work together to develop TV technology and products although details aren't decided, said Nishida and Sharp President Mikio Katayama.
``Many companies are starting to make choices to focus on core businesses,'' Katayama said.
As a result of the collaboration, Sharp will buy about 50 percent of its system LSI for TVs from Toshiba, and Toshiba will buy about 40 percent of LCD panels from Sharp by 2010, and the numbers may grow in the future, they said.
The deal ensures a steady supply of components for both firms without spending a lot of capital to build factories. With the pace of change in the panel business, by the time you have a factory online the product you have could be obsolete anyway. Sharp's already making large LCD panels, and Toshiba has been making chips since Godzilla woke up. Both Sharp and Toshiba opened higher on the Nikkei on the news.