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Fujitsu reportedly leaving PDP market as competition intensifies

Posted: 25 Jan 2005 ?? ?Print Version ?Bookmark and Share

Keywords:plasma display panel? pdp? lcd?

Despite robust market demand, Fujitsu Ltd is considering scaling down or completely withdrawing from the plasma display panel (PDP) business, according to Japanese news reports.

Fujitsu was the first company to successfully mass produce plasma display panels, and formed a joint venture with Hitachi Ltd called Fujitsu Hitachi Plasma Display Ltd (FHP) in 1999. According to reports, Fujitsu would transfer part or all of its shares of FHP to Hitachi, as well as a number of PDP-related patents.

Both Fujitsu and Hitachi denied the report, saying that the two companies have been discussing the business development of FHP but have not yet decided a course of action.

Fujitsu is the second Japanese company reportedly mulling an exit from the plasma display market.

In December, Sony Corp. was said to be leaving the PDP market to focus on several liquid crystal display (LCD) ventures, according to reports. Sony denied the company was exiting the market in the near term.

High capital investment costs, growing competition from LCDs, and intensifying competition from Korean suppliers are all giving Japanese companies second thoughts on continuing in the plasma display business, despite growing demand.

The Japan Electronics and Information Technology Industries Association (JEITA) estimates PDP shipments would increase from 2.95 million units in 2004 to 4.3 million in 2005.

Another firm, DisplayBank Co. Ltd said that PDP shipments soared 110 percent in 2004, reaching 3.61 million units.

But just as Korean companies have forced Japanese suppliers to either retreat from the LCD market or collaborate with one another to survive they're doing the same in plasma displays.

DisplayBank noted that in the fourth quarter, 56 percent of PDP shipments came from Korea, outpacing the 41.9 percent from Japan. A year ago, Japan accounted for 59.1 percent of shipments with Korea 38.8 percent.

At the same time, the firm noted that plasma display prices have fallen, with a standard-definition 42in. panel now costing $840 compared to $1,300 a year ago.

To remain competitive, Japanese manufacturers have had to keep investing in production facilities. But high investment costs and falling prices are squeezing margins, forcing suppliers to reevaluate their business strategies.

FHP has doubled its capacity to 100,000 panels a month from 50,000 units last March. It will soon begin constructing a third line, slated to begin operating the end of this year. FHP will increase production by 150,000 panels per month by 2007.

But rivals are keeping pace. Japan-based Matsushita expanded its capacity to 100,000 units a month at the end of last year and is building a new factory. Korea-based Samsung SDI has already reached a capacity of 250,000 units (counted in 42-inch panels) a month.

- Yoshiko Hara Spencer Chin

EE Times

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