Sharp and Toshiba have agreed to collaborate closely in their LCD and semiconductor businesses.

The electronics giants will initiate the partnership in fiscal 2008, which they hope will allow each company to make full and effective use of its respective strengths and resources.

This will include Sharp's capabilities in LCDs and Toshiba's expertise in advanced semiconductors.

The alliance will start with an expansion of reciprocal procurement, whereby Sharp will get system large-scale integration chips (LSIs) for LCDs from Toshiba, and Toshiba will obtain Sharp's LCD modules for TVs of 32in and larger.

System LSIs for TVs are increasingly required to support advanced functions and higher levels of performance alongside the core role of image processing.

Sharp aims to satisfy about 50 per cent of its total demand for system LSIs for TVs in fiscal 2010, while Toshiba aims to meet 40 per cent of its demand for LCD modules in the same year.

The LCD TV market has seen rapid growth in recent times, driven by falling prices and the upcoming digital switchover in the UK, and is showing no signs of abating.

Sharp and Toshiba aim to secure a leading position in the LCD TV market, and reckon that they can overcome the increasingly intense global competition by joining forces.