Toshiba and Matsushita Electric Industrial will jointly manufacture small electroluminescent displays in an effort match the output from Korea-based makers, according to a Japanese report.

The two companies will set up manufacturing lines in Ishikawa Prefecture in fall 2009, aiming to produce 1 million “high-quality” 2.5-inch organic electroluminescent (EL) displays, according to a report in Monday’s Nihon Keizai Shimbun.

This is a first for domestic Japanese production of EL displays on this scale, the report said. The displays are targeted at cell phones and other small devices.

EL displays are based on organic light-emitting diode (OLED) technology that uses electroluminescent organic materials. The display panels are extremely thin because they don’t need backlights. The electroluminescent layer contains a polymer substance that directly converts electricity to light.

The two companies are chasing Samsung, which has already begun mass production. The goal is to bring costs down and stabilize quality. This then can be applied to the manufacture of larger-size TV panels.

Read more