Japanese electronics giants NEC and Sharp are to create a joint venture that will develop 8K resolution, 5G-enabled display solutions for the future.
The companies said this week they’re planning to create the joint venture by merging NEC Display Solutions Ltd. with Sharp’s main display business. The details of the transaction were not disclosed, but it will see NEC transfer 66% ownership of the NDS division to Sharp, while retaining a 34% equity stake in the new firm, Advanced Television reported. The deal is expected to close by the summer, the companies added.
The plan is that by creating the joint venture, the companies will be able to “build upon their strengths and address the visualisation needs of their global customers”.
It’s an important development because NEC and Sharp both remain major players in the display technology industry, especially when it comes to visual technology and digital signage. The two firms are both keen to eye future opportunities in the emerging 8K, Ultra High definition space.
Moreover, the advent of 5G networks which are being rolled out in countries across the world and the increasing reliance on that higher bandwidth, it makes sense for the companies to work together to create next-generation screen technologies that make use of it, they said.
The partnership would be “mutually complementary”, said Sharp’s senior executive managing office Fujikazu Nakayama. He added that the merger would help the firm’s expand their business and sales opportunities.
Analysts from Futuresource told Advanced Television they believe the merger is a good move, with NEC’s consultancy-led sales approach likely to create more opportunities for Sharp’s high-end display products. Meanwhile, Sharp’s history of innovation will enable NEC to expand its portfolio to focus more on high-end niche markets, the analysts said.
“In short, the joint venture will no doubt prove to be a positive one but the threats that led to its creation are only set to grow,” Futuresource said. “Dynamics in the display industry are shifting rapidly and whilst this may lead to further mergers between Japanese, and even Taiwanese companies, brands must be able to react swiftly, or risk being left behind.
The companies said all NEC-branded products will in future be produced and distributed by the joint venture.
