IBM, Toshiba want to end LCD deal

Toshiba and IBM are about to end their 12-year-old LCD (liquid crystal display) manufacturing joint venture, Japanese newspaper The Nihon Keizai Shimbun reported Thursday.

IBM spokesman John Buchholz denied the newspaper's report that the two companies had reached an agreement to scrap the joint venture. However, he declined to comment on whether IBM and Toshiba are in discussions about ending the operation. A Toshiba representative could not be reached for comment.

The 50-50 joint operation, Display Technology Inc., runs production out of a Toshiba plant in Himeji and an IBM plant in Yasu. The Yasu plant is IBM's only LCD production facility.

Increased competition and slumping demand have increased pressures on manufacturers throughout the LCD sector. After the joint venture ends, IBM will compensate for Display Technology's output by purchasing LCDs from outside vendors, The Nihon Keizai Shimbun reported. Toshiba will invest in ramping up its Himeji plant line to make smaller LCDs for mobile phones and handheld computers, the newspaper said.

Toshiba recently signed a joint venture with Matsushita Electric Industrial Co. Ltd. to produce LCDs in Singapore. IBM and Toshiba maintain several other partnerships, including a recently announced joint venture between the two firms and Sony Computer Entertainment Inc. aimed at developing a 1T flop-class consumer microprocessor within the next five years.