Sony and NEC eye optical drive partnership

Sony and NEC eye optical drive partnership

Japanese giants establish joint venture to design and build DVD/CD drives

Japanese electronics manufacturers Sony and NEC announced plans late yesterday to establish a joint venture in the highly competitive optical disc drive market.

Both vendors will transfer their respective operations in the optical disc business into a new entity, Sony NEC Optiarc, which is expected to begin operations on 3 April designing and building DVD and CD drives.

Sony will hold a 55 per cent stake in the venture, and NEC will hold the remaining 45 per cent. The new company is expected to deliver annual sales of about $1.88bn, NEC said.

Shinichi Yamamura, deputy president of Sony's Video Business Group, will become president of the new company.

According to reports, the venture will control some 20 per cent of the global optical drive market, following closely behind Hitachi-LG Data Storage, a venture between Japanese firm Hitachi and South Korea's LG Electronics.