Samsung Electronics and Sony are set to invest an additional $1.9bn in a new flat-screen production line at their joint venture factory in South Korea in a bid to boost manufacturing efficiency in the face of price falls for liquid crystal display televisions.

Samsung had faced mounting speculation that it might lose its Japanese partner after Sony said last week it would take a one-third stake in Sharp's $3.5bn LCD panel plant in western Japan in a move aimed at diversifying its supply sources amid growing demand for flat-panel televisions.