Hitachi, Sony and Toshiba have signed a memorandum of understanding (MOU) with the Innovation Network of Japan (INJC) to spin off and merge parts of their LCD businesses to create a new company that will be globally competitive.

All of the three companies’ small- and medium-sized LCD businesses will be transferred to a new company (NewCo). INJC will inject about 200-billion yen into the organisation and will hold 70% of the shares. Hitachi, Sony and Toshiba will each hold 10% of NewCo.

The global market for small- and medium-sized displays is expected to grow rapidly in the face of strong demand for high-resolution, high value-add products – especially in the smartphone and tablet markets.

Japan is currently a leader in this arena and NewCo will combine the expertise of three of the country’s major ICT companies, together with the capital investment from INJC.

According to a statement from INJC, NewCo will utilise the high value-added technologies from the three vendors and establish new production lines using the capital injection.

By using the existing production capabilities of Hitachi, Sony and Toshiba it is believed NewCo will improve its cost-competitiveness to become a global leading company in the small- to medium-sized LCD market.

A major thrust of the new organisation will be research and development into new technologies, including higher-resolution and thinner organic LED displays.