Casio to procure LCDs from Taiwan's HannStar

TOKYO (Reuters) - Casio Computer Co Ltd said on Wednesday it would buy liquid crystal displays from Taiwan's HannStar Display Corp, aiming to boost its presence in the cellphone-use panel market without investing in its own production facilities.

The Japanese consumer electronics maker has agreed to extend to HannStar its technologies to make high-resolution panels. In return, Casio will be given priority in procuring the panels HannStar produces with those technologies.

Casio is the world's largest maker of LCD panels used in digital cameras with a 40 percent market share while HannStar is Taiwan's fifth-largest LCD maker.

Casio's flagship LCD plant in western Japan has been running at full capacity, hampering its attempt to expand its sales in the fast-growing market for mobile phone displays.

"Limited capacity prevented us from making an all-out entry into the cellphone panel business," a Casio spokeswoman said.

"We could have boosted our own capacity or built a new plant. But after thorough consideration, we've decided to take the least risky and most secure way."

HannStar plans to start commercial production of panels based on Casio's technologies in the six-month period from April 2006.

Casio's initial monthly procurement would be equivalent to about 10,000 "motherglasses" measuring 550mm by 650mm, the Tokyo-based company said. Motherglasses are glass panels from which displays are cut.