Samsung claims that its LCD-making joint venture with Sony will continue, despite Sony's unexpected announcement of a new agreement with Sharp.

Sony announced on Tuesday that it will take a 34 per cent stake in a new $3.5bn LCD panel factory that Sharp is building in Japan.

However, since April 2005, Samsung and Sony have invested more than $1.9bn in their joint venture firm S-LCD, which produces LCD panels at the Tanjeong plant south of Seoul.

"We are consulting with Sony on a joint venture for a second eighth-generation production line to be built in Tanjeong," Lee Sang-wan, of Samsung's LCD business unit, told South Korea's Electronic Times.

An unnamed source at Samsung told Reuters that negotiations for the new production line were almost concluded.

While Korea-based S-LCD is currently limited to so-called eighth-generation LCD manufacturing technology, Sharp's new Japanese venture with Sony will be the world's first tenth-generation facility.

Like S-LCD, the new joint venture will produce large format LCDs suitable for TVs and PC monitors.

Sharp is generally recognised as an LCD pioneer and the world's most technologically advanced LCD maker.

While the companies are prepared to cooperate in LCD manufacturing because of the huge investments required, they all assemble finished products from the LCD panels and therefore compete for the same customers.

Samsung was ranked as the world's largest LCD TV maker in 2007, with Sony and Sharp in second and third place respectively.

Sony, however, has had difficulty meeting strong demand for its profitable line of LCD TVs, making cooperation an attractive alternative for the Japanese firm.