Sony, Hitachi, & Toshiba Merge Display Businesses

A chord of three strands is not easily broken, or at least Sony, Hitachi, and Toshiba hope so. The three companies are merging their respective small- and medium-sized LCD display businesses (i.e., smartphone and tablet screens) and joining together with Innovation Network Corporation of Japan (INCJ). The new company will be called Japan Display.

Although three major electronics manufacturers joining forces is big enough news by itself, the involvement of the INCJ adds a layer of intrigue. INCJ is semi-public and receives some funding from the Japanese government; Reuters reports that as much as 90% of its funding, in fact, comes from the government. The INCJ, by investing 200 billion yen, will hold 70% of the group’s stake, with Sony, Hitachi, and Toshiba each claiming 10%.

Reuters reports that the combined market share of Sony, Hitachi, and Toshiba--er, Japan Display--will make it the number one manufacturer of small- and medium-sized displays, leapfrogging number two Sharp (which is awaiting a $1 billion investment from Apple) and putting Samsung Mobile Display, LG Display, and others in the rear-view mirror.

Japan Display will bring together the collective brainpower of the three companies and intends to pump a lot of cash into R&D, particularly as it pertains to thinner and higher-res OLEDs.

The group’s plan is to sign all the requisite agreements this fall and finish off the merger in the spring of 2012.