Anticipating increased demand for liquid crystal displays (LCD), Sharp and semiconductor maker Mosel Vitelic will form a joint company to design, manufacture and market LCD-driver chips.

The two companies will launch the new company in January 2001.

Sharp is expecting a big jump in use of LCDs and in Taiwan's growing dominance in the field of LCD production. The LCD-driver chips, which are the subject of this deal, are as vital a component as the panels themselves. The chips are responsible for controlling the entire LCD panel, and form the interface between it and the rest of the device on which it is used.

As LCD panel manufacturing picks up in Taiwan, driven by global demand for notebook computers, handheld devices and mobile phones, so does demand for LCD-driver chips. Sharp hopes to service this increasing demand through the new joint venture, which will be able to supply the chips locally.

Sharp will provide its technology for LCD driver chips to the joint venture, which will focus on designing new chips. The new company will also handle the manufacture of the chips by contract through associated chip-manufacturing foundries in the Mosel Vitelic group.