Sony is planning to work with Japanese oil company Idemitsu Kosan on the development of luminous materials for future OLED displays, the two companies said Tuesday.

Sony and Idemitsu will also cross-licence OLED-related patents as part of the joint development plan, which was spelled out in a memorandum of understanding signed by the two companies in Tokyo today. A formal deal is expected to be signed at the end of January, they said.

The deal will initially cover a five-year joint development term.

OLED (organic light emitting diode) displays work by running an electrical current through an organic luminous material, which causes the materials to luminesce. Because the material produces light a back-light isn't required and so display panels can potentially be thinner, more energy efficient and cheaper than existing LCD (liquid crystal display) panels.

Some basic OLED displays are already in commercial production and can be found in devices such as digital music players, digital still cameras and cell phones. However the technology is still not mature enough to scale up to larger sizes to make long-lasting panels suitable for applications such as televisions or computer monitors.

Many companies including Sony are pursuing development of OLED for these markets because the technology is capable of producing colours that match or beat existing LCD panels.

Sony has been working on OLED technology for some time and in 2001 succeeded in making a prototype 13in panel. That is the single largest panel the company has made to date, although in 2003 it joined together four 12in panels to produce a prototype 24in display.

The largest OLED panel that Sony has produced commercially is a 3.8in model, used in its Clié PEG-VZ90 PDA (personal digital assistant).

Idemitsu is best known to many Japanese as an oil company and gas-station operator, but the company works in other fields including the development and manufacturing of luminous materials for OLED panels.

Sony is a customer of Idemitsu for some OLED technologies and the two already communicate at the engineering level, said Yoshikazu Ochiai, a spokesman for Sony in Tokyo.