Sony To Buy Seiko Epson's Small LCD Display Unit

Sony Corp. (6758) said Wednesday it will buy Seiko Epson Corp.'s (6724) Chinese subsidiary that makes small and medium-sized liquid crystal displays for CNY775 million ($118.19 million), as the Japanese electronics giant banks on strong demand for displays used in mobile devices and car electronics.

Sony's decision highlights how major electronics makers worldwide are trying to ensure they have enough resources to cash in on the most promising market segments, such as smartphones and low-emission vehicles.

Seiko Epson, a Japanese printer and electronic parts maker based in Nagano Prefecture, central Japan, plans to sell its Chinese unit, Suzhou Epson Co., to Sony by the end of September, the two companies said in a joint statement. The factory in Suzhou, eastern China, produces thin-film transistor--or TFT--LCD panels. A Seiko Epson spokesman declined to disclose the plant's output capacity.

Sony already acquired part of Seiko Epson's small LCD display operations in Japan in April 2010. While the purpose of that facility is the upstream manufacturing process, the Suzhou plant is for the downstream process.

For some key products in smartphone and other market segments, it is important for Sony to have the ability to produce displays without outsourcing part of the process, a company spokeswoman said.

"This acquisition will help differentiate our displays," she said, noting that Seiko Epson's Chinese unit possesses highly advanced know-how for touch-screen assembly and several other specialized technological assets.

Sony was already interested in the Suzhou unit when it acquired Seiko Epson's Japanese LCD assets, she added.

For Seiko Epson, the sale completes the realignment of its LCD display operations for now. By unloading TFT LCD display operations, Seiko Epson can direct more resources into LCD displays used for projectors, the spokesman said.