Sony Unloads LCD Venture Stake on Samsung
Sony has figured out a way to at least partially stem the massive losses at its struggling TV business: Dissolve its LCD manufacturing joint venture with Samsung. Sony said today that it will sell its nearly 50 percent stake in the company, S-LCD, to Samsung for $939 million.
The transaction, which allows Sony to purchase LCD panels from Samsung at market prices without bearing the responsibility and costs of operating the facility that manufactures them, is expected to save the company some $640 million a year.
That’s significant savings for Sony, which last month warned that it would lose money, for the fourth year in a row, in its current financial year. But is it enough to set the company’s once-core business on the road to recovery? Remember, Sony’s TV division has lost money for seven straight years.
“It’s a step forward for Sony,” Nomura analyst Shiro Mikoshiba told Bloomberg. “Canceling out the venture enables Sony to become more flexible in procuring panels. Still, Sony continues to face falling prices and heavy fixed costs.”