Sony expanded a plan to outsource global LCD TV production on Wednesday, announcing a pact to have its popular LCD TVs for the European market made by the world's largest contract electronics manufacturer.
Sony sold a 90.1 percent stake of its Slovakia subsidiary to Taiwan's Hon Hai Precision Industry as part of the deal, the companies said in separate statements.
The deal is aimed at improving the profitability of Sony's LCD TV business, the Japanese company said. Sony has struggled over the past several years to restructure its operations to better compete against rivals, including Apple, Hewlett-Packard and Samsung Electronics.
Last September, Sony and Hon Hai signed a similar deal for the Taiwanese company to take over an LCD TV factory in Mexico and make Sony TVs aimed at markets in the Americas. Sony sells LCD TVs under the Bravia brand.
Sony employs 2,500 people at the Slovakia subsidiary, which is located in Nitra City, in the Slovak Republic, it said. Employees at the factory will work for Hon Hai once the deal is completed. The companies plan to close the sale by September of this year, they said.
The deal with Hon Hai is subject to review by regulators in several countries before it can be finalized.
Sony returned to profitability in the last three months of 2009, achieving its first operating profit in five quarters. The company maintained its TV sales target for 2009 at 15 million units this fiscal year, which ends March 31, and said it hopes to sell around 20 million TVs next fiscal year. Sony set a goal to return its TV operations to profitability in the next fiscal year.
Hon Hai is a longtime Sony partner. The Taiwanese company already manufactures PlayStation 3 game consoles and other devices for Sony. It also assembles gadgets such as the iPod and iPhone for Apple and PCs for Dell at factories in Taiwan and China. The company operates under the trade name Foxconn.