Hitachi and Matsushita Electric have agreed to jointly produce liquid crystal display (LCD) panels.
The two companies plan to share the $899m (£488m) cost of a new LCD plant planned by Hitachi to be built as early as 2006. The factory will make large-scale panels for televisions.
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Hitachi and Matsushita said nothing has been decided as of yet, when asked to comment.
Such tie-ups have become more common in the display industry in recent years as companies look to share their expertise to speed development of new technology and share the increasingly high cost of advanced production lines.
Earlier this year ground was broken on a new LCD plant that is being built under a joint venture formed by Samsung Electronics and Sony. The plant in South Korea will act as a main production base for LCD panels for both companies when production is scheduled to begin in the first half of 2005.
Behind the need for more advanced technologies and panels is a fast increasing demand for a wide range of devices using LCDs, such as televisions, computer monitors and cellular telephones.
In Japan shipments of LCD televisions were just over 1 million units for the first six months of the year, an increase of 65.7% on the previous year, according to figures from the Japan Electronics and Information Technology Association.
Martyn Williams writes for IDG News Service