Samsung Electronics is in the final stages of talks with Sony to jointly build a new LCD panel production line and the two may cooperate on another, bigger line, a Samsung source said on Wednesday.
Sony , which runs a joint venture to produce liquid crystal display (LCD) panels with Samsung, on Tuesday said it would take a one-third stake in Sharp's $3.5 billion LCD panel plant in Japan to meet rising demand for flat-screen televisions.
The move raised concerns in the Korean market that Sony may not cooperate with Samsung in future projects, although Sony President Ryoji Chubachi pledged to continue running S-LCD, its existing joint venture with Samsung.
"We've almost wrapped up discussions with Sony for the 8-2 (eighth generation/line 2) production line and it's been going well," said the Samsung source, who wanted to remain unidentified.
The new plant would be located at the company's LCD production complex south of Seoul. Sony and Samsung, the world's biggest maker of large-sized LCDs, are already operating the 8-1 line, an eighth-generation line in the S-LCD complex.
The investment size for the new line has not yet been set but will likely be similar to the 8-1 line, the source said.
Samsung and Sony spent combined 1.8 trillion won ($1.9 billion) in the initial stage of the existing line. Samsung is currently ramping up the 8-1 line on its own, spending another 2 trillion won.
Samsung also sees it is still possible to work with Sony on a bigger "tenth-generation" LCD production line, the source added.
Sharp's new factory Sony is investing in will be the world's first using the tenth-generation glass substrates, which yield more panels than earlier generation lines.
Samsung benefited from Sony's brand power and steady demand for its screens, while the alliance provided Sony with a partner to shoulder heavy investment needs in the flat-panel industry.