Sony, NEC Form Joint Venture for Optical Drives
Sony and NEC announced earlier today their decision to finalize the joint venture proposition that was first announced in November 2005.
As per the deal, Sony would own 55 percent stake in Sony NEC Optiarc Inc., name of the joint venture, while NEC would hold the remaining equity.
Sony, supporter of the Blu-Ray optical technology, and NEC, supporter of the rival HD-DVD optical technology, said they would merge their optical divisions within Sony NEC Optiarc to control 28 percent of the market. The total sales revenue is expected to be around 220 billion Yen, or $1.88 billion. Sony said it might also start producing HD-DVD media later in the year.
Both companies are anticipated to spin off their divisions in the joint venture by April 1st and merge them by April 3rd of this year.
Shinichi Yamamura, who currently operates the video business at Sony, will lead the joint venture firm. - Subscribe to CoolTechZone.com’s RSS Feed
The companies mentioned that Sony will supply the optical pickups and head technology, while NEC would allocate resources in chipmaking.
The new venture still needs approval from regulatory agencies and shareholders.
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