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Sony to enhance its local partnerships

Japanese electronics giant Sony Corp said yesterday that it would enhance its partnerships with local flat panel makers as part of its goal to boost its share of the liquid-crystal-display (LCD) television market this year.

The firm’s foreign exchange losses would not be severe, as they were offset by the firm’s currency hedging against volatility, constant cost-saving efforts and a rise in orders, Sony president Ryoji Chubachi told a press briefing in Taipei yesterday.

Every ¥1 appreciation against the greenback affects earnings by about ¥6 billion (US$59.7 million) as many of Sony’s products are traded in US dollars, he said.

This year, Sony is aiming to seize a 15 percent to 20 percent share of the LCD TV market in expectation that the macro environment would improve by the end of the year following a recovery in the US economy, Chubachi said.

“To seek further growth, LCD TVs will be one of the most important products for Sony this year,” he said.

To hit the target, Sony would have to sell around 15 million to 20 million flat-screen TVs this year, based on a forecast of a total 105 million unit sales this year by market researcher DisplaySearch.

Sony grabbed an 11 percent to 12 percent share last year, behind the top-selling Samsung Electronics Co, the Austin, Texas-based researcher said.

Sony sold around 10 million flat-screen TVs last year and 6 million units in 2006, Sony senior vice president Naofumi Hara said on the sidelines of the press briefing.

To secure sufficient panel supply this year, Sony plans to source more LCD panels primarily from S-LCD, a panel venture with Samsung Electronics Co and to strengthen its partnership with Taiwanese suppliers in order to cope with the growing demand for LCD TVs, Chubachi said.

Sony buys LCD screens mainly from Taiwanese makers AU Optronics Corp (友達光電) and Chi Mei Optoelectronics Corp (奇美電子), DisplaySearch’s data showed.

A newly unveiled panel venture between Sony and Sharp Co would begin production until next year, Chubachi said.

He also expected panel prices to fall this year, but he did not elaborate further.

“Sony needs to outsource more production to more local manufacturers to support its shipment growth because of limited capacity,” said David Hsieh (謝勤益), a vice president at DisplaySearch.

Hon Hai Precision Industries Co (鴻海精密) and Wistron Corp (緯創) are also making TVs for Sony, he said.

Chubachi said his company bought between 10 percent and 15 percent more electronics and components from local electronics firms in the year ending March 31. He declined to reveal the company’s purchase plans for this fiscal year.

Separately, Sony plans to expand its purchases of electronics and to increase its investment in research and development as it has now formed closer partnerships with Taiwanese firms, president-elect Ma Ying-jeou (馬英九) told reporters following a meeting with Chubachi yesterday morning.

Sony was the third-largest buyer from local electronics companies last year after computer notebook makers Hewlett Packard Co and Dell Inc, Ma said.
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