Taiwanese electronics maker Hon Hai is getting ready to buy a majority stake in Hitachi's display unit, to become the world's top manufacturer of small and mid-sized LCD's.
Japan's Nikkei daily said the 1.2 billion dollar investment will allow Hitachi's LCD arm, Hitachi Displays, to build a new factory in Japan that will begin operating in 2012 to supply Hon Hai.
Hon Hai is one of the biggest manufacturers of Apple's iPhone and iPad.
Rival Sharp is currently the top producer of small and mid-sized LCD panels, but ownership of Hitachi Display and its recent acquisition of Chimei Innolux would move Hon Hai ahead of the Japanese company in terms of market share.
Hitachi shares rose slightly in early trade Monday as investors viewed the report as a sign of Hitachi's progress in streamlining its sprawling business.
Competition in this segment of the LCD panel business is intensifying, with Sharp considering expanding its small LCD production capacity while Toshiba is also set to build a new LCD factory for 100 billion yen, which will also supply Apple.