Hitachi, Matsushita and Toshiba have agreed to establish a joint company to make and sell LCD panels, the three announced today.

The new company, IPS Alpha Technology, will start trading on 1 January 2005, and has 70 million yen (£360m) in the bank. Hitachi has taken 50 percent of the new company, and the other two will have between 21 and 25 percent each of the remainder, with potential eight percent made available to other companies.

A preliminary agreement to build a production line at Hitachi's Mobara factory in Japan was announced at the end of August. IPS Alpha Technology will make 23-inch LCD panels, with production of 2.5 million units per year in 2008.

The announcement of the new venture came a day after two of the partners said they were stopping production of large-screen cathode ray picture tubes at a joint-venture plant in New York because of the availability of cheap CRTs from Asia and a shift in consumer tastes.