Japanese electronics manufacturers Sharp Corp. and Toshiba Corp. said Friday they will collaborate in flat-panel televisions, a Japanese newspaper reported.

As part of the deal, Sharp will begin supplying Toshiba with LCD (liquid crystal display) panels of 32 inches from a new plant worth $380 billion, the company is currently building in Osaka, western Japan, and then use them to make LCD TVs to be sold under their brand, according to The Nikkei newspaper. In return, Toshiba will sell large-scale integration circuits (LSI) to Sharp. LSIs are key technology in image processing in LCD TVs.

"It would be difficult for one company to do everything on its own. It's necessary to join forces with others that have complementary strengths," said Atsutoshi Nishida, Toshiba’s President.

Financial terms of the agreement were not disclosed, but Sharp reported that it plans to buy half of its LSIs from Toshiba by 2010. Toshiba also plans to purchase 40 percent of its LCDs from Sharp in the same timeframe.

Toshiba currently obtains LCD TV panels from IPS Alpha Technology LTD, a company that it jointly owns with Matsushita Electric Industrial Co and Hitachi Ltd, as well as from South Korea's LG Electronics Inc.

The collaboration between the two companies, also seen as rivals, is a reflection of the increasingly competitive LCD TV market. The partnership will help both companies maintain their desire of bringing a continuous high-end supply of LCD products into the market.

Sharp currently has 57,600 employees, while Toshiba, built in 1875, comprises a global network of more than 670 companies with 191,000 employees and annual sales in excess of $60 billion.

Both companies wouldn’t immediately comment on the newspaper report, though Sharp hinted that an announcement could come later Friday.