The 50-50 joint venture based in Tangjeong, 100 kilometers (62 miles) south of Seoul, was expected to cost 2.1 trillion won (1.78 billion dollars), Samsung said.

It would produce large, seventh-generation liquid crystal displaypanels.

Samsung officials say the partnership will help the world's top microchip maker strengthen its position in the world's fast-growing flat panel market.

The Japanese company, currently the world's leading TV manufacturer, will in turn secure a supply of flat panels for televisions and computers as it seeks to revamp its product offerings.

Up to now, Sony the has procured all its LCD panels from Japanese companies and market leader LG.Philips LCD, a joint venture between South Korea's LG Electronics and Dutch group Philips Electronics.

Major LCD makers have been increasing capacity to meet booming demand for flat-screen televisions and computer monitors as the traditional cathode ray tube screens are dropped.

SPACE.WIRE