Sony, Toshiba, and Hitachi formalize Japan Display merger

Three of Japan’s biggest manufacturers have now signed definitive agreements to merge their small and medium-sized display production, in a new deal largely funded by the public-private partnership Innovation Network Corporation of Japan. INCJ was set up two years ago as a means to invest in science and technology, with the majority of its funding sourced from the Japanese government. The move will give Hitachi, Sony, and Toshiba a 10 percent stake each in Japan Display, with INCJ investing over ¥200 billion (about $2.6b) for a controlling 70 percent cut. Once completed, the assets of all three manufacturers will be pooled into the new firm, making Japan Display the largest touchscreen LCD producer in the world.

The merger is driven by a desire to exploit economies of scale that are unavailable to each company at present. Outside of material costs, the firms may also see this as a way to pool R&D spending and patents, allowing them to better compete with rival Chinese and South Korean manufacturers.