Toshiba and Matsushita to Unify LCD Business; A New Joint Venture Slated for April 2002.

Business Editors

TOKYO--(BUSINESS WIRE)--Oct. 17, 2001

Toshiba Corporation and Matsushita Electric Industrial Co., Ltd. today announced that they will unify their liquid crystal display (LCD) and next generation display businesses in a joint venture company that will be incorporated in April 2002, and 60% and 40% owned by Toshiba and Matsushita, respectively.

The business integration will involve product development, manufacturing and sales operations, and will make the new joint venture the world's third-largest LCD display company, based on sales turnover in the fiscal year ended March 31, 2001. Making best use of the synergies and efficiency enhancements expected from unification, the new company will seek to take a leading position in the global market for LCDs and next generation displays, including organic light emitting displays (OLEDs).

The global LCD market is expected to continue high annual growth of 17 percent over the coming years, thanks to the increasing popularity of personal digital assistants (PDAs), LCD TVs and Internet appliances. It is also a highly competitive market, and the joint venture will allow Toshiba and Matsushita to increase their global competitiveness and accelerate development of emerging applications, including LCD TVs and Internet appliances.

In addition to its parents' technology in high luminance, high resolution and low power consumption LCDs, the new joint venture will also be able to draw on Toshiba's advanced manufacturing technology for large-sized low-temperature polysilicon (LTP) thin film transistor (TFT) LCDs and Matsushita's cutting-edge LCD image processing technology for fast-response and high quality TV. Combined expertise of Toshiba and Matsushita in LCDs for home appliances, PCs and mobile products will enhance finished goods development such as digital TVs, PCs and new generations of mobile products. The new company will expand LCD applications by realizing system-on-glass technology.

As the new company makes the best use of the economies of scale resulting from unification, it will work for early standardization of design methodologies and manufacturing processes. The company is also aiming for the development of high-density mounting technology and simplification of production processes, so as to be the cost leader in the global market.

The new joint venture company will take over all of its parent companies' manufacturing sites for LTP TFT LCDs, amorphous silicon TFT LCDs and super twisted nematic LCDs; Toshiba's Fukaya Operations, a part of Himeji Operations and TFPD CORPORATION, previously Display Technologies, Inc. Himeji; and Matsushita LCD business group's Ishikawa and Uozu sites.

The company will also take over AFPD PTE. LTD., a Toshiba/Matsushita joint venture in Singapore that will produce LTP TFT LCDs, as a wholly owned subsidiary.

Beyond LCDs, the new company will also take the lead in promoting early commercialization of OLEDs, drawing on its parents' intellectual property and LTP TFT LCD engineering and manufacturing resources. OLEDs are expected to become the display-of-choice for mobile phones and thin TVs.

Disclaimer Regarding Forward-Looking Statements:

This release contains forward-looking statements about the future. To the extent that statements in this release do not relate strictly to historical or current facts, they may constitute forward-looking statements. These forward-looking statements are based upon current assumptions and beliefs in light of the information currently available, and involve known and unknown risks and uncertainties. Actual growth or results may differ materially from those discussed in the forward-looking statements. Specific risks and uncertainties include, but are not limited to, worldwide economic and business conditions, volatility in market demand for electronic equipment and components, the ability of the companies involved to respond to rapid technological changes and changing customer preferences and introduce new products in markets that are highly competitive in terms of price and technology, and legislative, regulatory, and industry initiatives that may affect planned or actual product features and marketing methods.