have formed an alliance to bolster their liquid crystal display panel businesses.
The announcement highlights the increasing competition in the flat-panel industry. Other players have already teamed up:
and Samsung have struck an alliance, as have Sharp and Toshiba.
In a press release late Monday, Hitachi, Canon and Matsushita said they would "merge their strengths to accelerate the development of cutting-edge display technologies and expand their scope of application."
The companies said they've also reached a basic agreement for Canon and Matsushita each to acquire 24.9% of the shares of Hitachi Displays Co., a wholly owned subsidiary of Hitachi that builds small and medium-sized LCD panels. They expect the deal to close by March 31, subject to regulatory approval. After the transaction is complete, Hitachi's stake in its Hitachi Displays unit will be 50.2%.
Global demand for LCD panels is growing as they're being used in many types of electronic devices, including mobile phones, flat-panel TVs, computer monitors, digital cameras and game consoles.
The three companies said intensifying competition has made it "imperative for LCD panel manufacturers to ensure a stable supply of high-quality LCD panels at low prices. This will require ongoing upfront investment and development of cutting-edge technologies."
Hitachi shares finished Monday up 21 cents at $71.71. Canon stock ended the session down 2 cents at $46.97, and Matsushita gained a penny to close at $20.55.