Everyone seems to be jumping on the multi-touch bandwagon lately and Sony is not one to be left out of the party. The company yesterday announced a new 3.5-inch multi-touch LCD featuring optical sensing technology and a 640 x 480 resolution screen.

According to Sony, current multi-touch screens use a multi-layer technique that increases the thickness of the display and leaves the input open to quality deterioration if the layers become loose. But the company’s new technology instead uses a low-temperature polysilicon display that allows optical sensors to be interwoven into the surface of the display, producing an ultra-thin surface which can recognize both finger and pen inputs.

Sony’s prototype LCD can handle up to five inputs at once – that’s three more than is possible on the iPhone. Testing samples will reportedly be made available to hardware builders shortly, but there’s no word on when we might see these screens pop up in actual devices.