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Pioneer to drop plasma panels biz

Posted: 07 Mar 2008 ?? ?Print Version ?Bookmark and Share

Keywords:plasma panel? LCD TV? Pioneer plants?

Amid intense competition, Pioneer Corp. is finalizing plans to withdraw from producing plasma panels as early as this year, and to focus instead on fabricating TV sets. Currently, Pioneer is in negotiations to procure plasma panels from Matsushita Electric Industrial Co.

Pioneer now makes panels for 42-, 50- and 60-inch plasma TVs at plants in Kagoshima, Yamanashi and Shizuoka prefectures. The Kagoshima facility could be closed as early as this year, with its roughly 600 employees to be absorbed through transfers. After halting panel production, the Yamanashi and Shizuoka factories would specialize in assembling TV sets.

In 2007, Pioneer ranked 5th in the global plasma TV market with a share of 7.3 percent. While it initially targeted sales of 720,000 units for the year ending March 31, sales of products launched last fall have sagged. As a result, the company downgraded earlier this year its fiscal 2007 sales projection to 480,000 units. The plasma TV operations are expected to incur operating losses amounting to $96.3M this fiscal year, thereby necessitating a major overhaul.

Pioneer has already unveiled plans to enter the LCD TV market as early as this summer by procuring LCD panels from Sharp Corp., with which it has a capital and business tie-up. By purchasing panels for LCD TVs that are 42 inches or smaller from Sharp and turning to Matsushita for panels for plasma sets measuring at least 50 inches, Pioneer seeks to boost its cost competitiveness and bolster its presence in the flat-panel TV market.

The global plasma-panel market totaled around $7.52 billion in 2006. Major Japanese manufacturers are Matsushita, holding the top spot in terms of market share, Hitachi Ltd at No. 4, and Pioneer. Pioneer's withdrawal from these operations means that only two Japanese domestic panel manufacturers will compete in global market.

- Dennis Barker
Digital TV Designline

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