Two of Japan's electronic giants will merge their worldwide display operations to boost the efficiency of the pair's new development projects in an expanding market.
NEC and Mitsubishi Electric will form a 50/50 joint venture in January to develop, market and produce CRTs (cathode ray tubes) and LCDs (liquid crystal displays) from April 2000.
The two companies said they expect the venture to ship approximately 10 million displays per year, including LCD monitors.
Both companies pointed to the booming demand for digital devices and expanding Internet usage as key drivers for increased demand in the display market. Earlier this year, Japanese display vendors, including NEC, had said that they would boost the production of TFT LCD (thin-film transistor LCD) screens, in particular, to accommodate rising demand.
The new venture will also absorb NEC's troubled subsidiary NEC Home Electronics. The announcement follows two recent reports saying that NEC will soon announce a major reorganisation of its business units and that the company is set to post a nearly $US500 million loss for the first half of its fiscal year, ending September 31, 1999.
Under the reported restructuring plan, NEC was expected to liquidate NEC Home Electronics and refocus its business on three core areas: semiconductors, computers and communications equipment.