Nippon Sheet Glass Co. has decided to withdraw from producing LCD television glass substrates in the face of plunging prices and the heavy financial burden of upfront investments.

The company will sell its 50 per cent stake in NH Techno Glass Corp., a joint venture established in 1991 with optical glass maker Hoya Corp.. Some domestic and foreign investment funds are likely to participate in the first round of bidding for the stake. The sales price is estimated at tens of billions of yen, and the buyer could be determined as early as January. Hoya is expected to hold onto its 50 per cent interest.

NH Techno Glass produces LCD TV glass substrates and other products in Yokkaichi, Mie Prefecture, as well as in Taiwan, Singapore and South Korea. Its group sales are estimated at about 50 billion yen (US$457.6 million). For the year ended March 31, the company´s net profit topped 2 billion yen.

U.S. firm Corning Inc., Asahi Glass Co., Nippon Electric Glass Co. and NH Techno Glass are the only companies that manufacture LCD TV glass substrates. But NH Techno Glass´s market share stands at a mere 5 per cent.

While Corning and Asahi Glass have established technology to supply larger substrates for the 10th generation of LCD panels, NH Techno Glass´ production technology is still at the seventh-generation level. With the increasingly rapid pace of technological advances, Nippon Sheet Glass has determined that it cannot compete against larger rivals with deeper pockets.

Nippon Sheet Glass decided in March to stop making plasma TV glass substrates. After exiting from the flat-panel TV market altogether, the company will focus on glass used in construction and automobiles.

Meanwhile, Hoya sees the LCD TV glass substrate business as a core growth area. By tapping the financial power of the new buyer, which is expected to be an investment fund, it intends to upgrade manufacturing equipment to produce newer generations of glass substrates.

Meanwhile, Central Glass Co. announced that it is withdrawing from plasma TV glass substrate production in South Korea, a sign that smaller players lacking funds are being forced to shed businesses.