Sony said Thursday it will pull out of its over three-year LCD TV panel joint venture with Sharp, part of Sony's ongoing attempts to reform its foundering TV business.
Sony said in March it was canceling a planned additional investment in the venture, and its eventual exit was widely expected.
It will recoup all of the ¥10 billion (US$126 million) investment it originally made in the venture in December of 2009. Sony holds about 7 percent of the company, with the rest owned by Sharp. The subsidiary operates a panel factory in western Japan, where Sharp has a massive manufacturing complex.
The announcement comes as both companies struggle to make their TV businesses profitable. Sony has repeatedly said it will not pull out of the business despite years of losses, but will instead focus on selling fewer sets at higher profit margins, and move to acquire panels instead of producing them in-house.
Sharp has shifted some production capacity to panels for smaller devices such as tablets, and turned to foreign partners with deeper pockets, such as Hon Hai Precision Industry, the parent company of Foxconn Electronics and one of the world's largest electronics manufacturers. The companies said in March that Hon Hai will invest ¥66.9 billion to acquire a stake in Sharp.
The plant run by the joint venture produces so-called "10th generation" LCD panels, among the largest in the world. Each measures roughly three meters by three meters and is best suited to making TVs that are 40 inches or larger in size.
Sharp has attempted to spur demand for larger sets in markets such as the U.S. and Japan, hoping to leverage its cost advantage.
Sony will receive payment from Sharp for its share of the venture by June. Both companies said they expect no material impact on their bottom line from the deal.