Tuesday, September 23, 2003
Korea's Samsung Electronics Co. Ltd. and Toshiba Corp. said they plan to combine their separate optical disk device units into a single company in a bid to reduce pricing and product development pressures.
The joint venture, which has yet to be named, would be 51% controlled by Toshiba and headquartered in Japan while Samsung would own the remaining 49% of the $1.8 billion revenue business.
While the new company would be managed from Japan, the Korea branch would handle production and other operational functions, the companies said.
Toshiba and other top Japanese electronics companies continue to consolidate businesses and are partnering increasingly with rivals at home and abroad in joint ventures to pare costs and boost operating margins.
The optical disk drive market is characterized by rapid technology changes and an ongoing transition to recordable DVD drives, making it difficult for individual companies to shoulder the costs of bringing new drives to market at a competitive and profitable rate.
"Price erosion and alliances are also making themselves felt and further intensifying competition," Samsung and Toshiba said in a statement. "The new joint venture will construct a competitive business structure that can promote optimized use of management resources and leadership in the global market."
By: DocMemory
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