Sony, NEC in talks for PDP tie-up

Sony and NEC are in talks about a possible tie-up of their PDP (plasma display panel) businesses, the two companies said Friday.

NEC, in Tokyo, announced in May that it will separate its PDP business into a wholly-owned subsidiary by October this year. After that, the company is planning to find third party investors for the new company, according to an NEC statement.

At the same time, NEC is building a new color PDP module production line at its plant in Kagoshima Prefecture, with ¥27 billion (US$220 million) capital. This new line is expected to be in operation in October, the statement said.

"We cannot disclose any details of this talk," said Shigenori Yoshida, a Sony spokesman. "However, this tie-up is not about Sony investing in (NEC's new PDP company) but about a technology alliance and our supporting NEC's shares in their investments," he said.

With a tie-up with NEC, Sony hopes to maintain a stable PDP supply channel, and the company is thinking of a similar alliance with more than one company, Yoshida said.

Sony had been considering taking a stake in a PDP business by investing in Fujitsu Hitachi Plasma Display Ltd. However, that negotiation has been called off, Yoshida said. "We have changed our direction and have decided to stay as a mere PDP buyer," he said.

NEC had been in talks with France's Thomson Multimedia S.A., its PDP joint development partner since 1998, with a view to forming a PDP joint venture. However, these talks, too, broke down earlier this year, Mitsumasa Fukumoto, an NEC spokesman said.

"It is true that Sony and NEC are in talks for establishing a stable PDP supply channel for Sony, but nothing has been decided," Fukumoto said.

NEC would not say where Sony stands in the discussion -- whether the tie-up will be on merely technology and supply channels, third party investments or a joint venture partner, but, "we are looking at many possible choices," Fukumoto said.