Sharp, Samsung to Supply Screens for Sony's Portable Game Unit
March 26 (Bloomberg) -- Sharp Corp., Japan's biggest maker of liquid crystal displays, and South Korea's Samsung Electronics Co. will supply screens for Sony Corp.'s PSP portable game player, scheduled to debut next holiday season, a Sharp official said.
Sharp and Samsung Electronics, the world's second-largest maker of LCDs, will provide screens measuring between four inches and five inches diagonally, said a Sharp official, who asked not to be identified. The official said the order was ``huge'' and declined to provide details, citing a non-disclosure agreement.
Sony, maker of the best-selling PlayStation 2 home video-game console, aims to topple Nintendo Co.'s dominant Game Boy in the portable market when it debuts PSP in Japan in December. Outfitting PSP could generate combined annual sales of $400 million for Samsung and Sharp, said IDC analyst Stanley Jeong.
``Considering how big Japan's game business is, this is a really big deal for both companies,'' said Jeong, who covers the LCD industry for technology-industry researcher IDC. ``The order will probably help Samsung and Sharp to secure more contracts to supply chips that go along with those LCDs.''
Suwon, Korea-based Samsung Electronics, declined to comment on the deal because the company does not discuss supply contracts, spokesman James Chung said. Yoshiko Furusawa, a spokeswoman at Sony Computer Entertainment, and her colleague Koichiro Katsurayama declined to comment on who won the contract, whether it had been signed, or details about the timing or size.
Heihachiroh Ochiai, a spokesman for Osaka, western Japan- based Sharp said he couldn't discuss ongoing contracts or which companies are customers.
`Big Project'
Samsung Electronics said when it announced fourth-quarter earnings in January that the company was working on a ``big project'' related to small-sized LCDs. The project would make game devices and personal digital assistants the main products using its screens measuring less than 10 inches diagonally, displacing mobile phone handsets, the company said.
The Sony deal ``will give Samsung a big push into the small- size panel market, as Samsung will offer a wider variety of products,'' said Yoshio Tamura, vice president at market researcher DisplaySearch.
LCD Shortage
Samsung Electronics sold 2 trillion won ($1.7 billion) worth of LCDs in the fourth quarter, accounting for 15 percent of the company's overall revenue under the stewardship of Lee Sang Wan, 54, who is president of Samsung's LCD division. The company said in January it expects the shortage in global LCD supplies to last until the first half of this year.
Sharp's shares have risen 10 percent this year, building on a 50 percent rally last year as demand for its display products surged. Zempei Tani, 61, vice president for Sharp's LCD business, said earlier this month he wanted to accelerate expansion of television screen production as much as possible to meet demand from consumers as they replace older sets.
Shares of Samsung Electronics have risen 11 percent since it said it was working on the ``big project,'' compared with the 2.7 percent gain by the benchmark Kospi stock index.
Tokyo-based Sony plans to sell PSPs in the U.S. and Europe starting next March. Nintendo, which is based in Kyoto, western Japan, will introduce a dual-screen version of the Game Boy later this year.
