Japanese high-tech firm Hitachi and Taiwanese IT giant Foxconn are eyeing an alliance to create the world’s largest supplier of small and mid-size LCD panels, a business daily reported yesterday.

In the envisaged tie-up, Foxconn would purchase a total of roughly 100 billion yen ($1.21 billion) in shares of Hitachi’s LCD panel subsidiary, Hitachi Displays Ltd., the Nikkei newspaper said.

Foxconn was expected to hold a controlling stake in Hitachi Displays, with Hitachi’s interest falling to around 30 per cent from the current 75.1 per cent, the report said.

The two companies were in the final stages of negotiations, the Nikkei said without citing sources.

Hitachi declined to confirm the report on its subsidiary, with a spokeswoman saying: “The company is seeking measures to strengthen its operations.”

Foxconn, a leading supplier of LCD panels for Apple Inc.’s iPhones and iPads, acquired Taiwanese LCD panel maker Chimei Innolux Corp. in March.

When the shares of Hitachi Displays and Chimei are combined, they controlled 17.3 per cent of the world’s small and mid-size LCD panel market in 2009, beating the top-ranked Sharp Corp. of Japan with a 16.5 per cent share, the Nikkei said.