Canon, the world's largest maker of digital cameras, currently has to buy LCD panels for its cameras, camcorders, copiers and printers.
Canon wants to eventually buy Hitachi Displays stakes from Matsushita, the maker of Panasonic products, and Hitachi to make it a subsidiary. Matsushita has also announced the purchase for its quarter last week.
Hitachi Displays owns 50 percent of large LCD maker IPS Alpha Technology.
Canon's announcement follows Sony's decision on Tuesday to take a one-third stake in a $3.5 billion LCD panel plant being built by Sharp.
Also, Sony and Samsung are reportedly in the final stages of talks to jointly build a new LCD panel production line.
Samsung and Sony, the world's largest and second-largest LCD TV makers, run an LCD joint venture, S-LCD.