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Pioneer to quit PDP manufacturing

Pioneer Corp will stop making plasma display panels in an effort to turn around its money-losing business, the Japanese electronics maker said yesterday.

Pioneer plans to procure the panels, used in flat-panel TVs, from another company. It said it was in talks with Japanese rival Matsushita Electric Industrial Co, which makes Panasonic products, to purchase plasma display panels.

Pioneer used to be one of the leading developers of the technology but has fallen behind bigger companies such as Matsushita and South Korea's Samsung Electronics Co and LG Electronics Inc.

"We have judged that maintaining the cost competitiveness of plasma display panels, or PDPs, at projected sales volumes will be difficult going forward,'' Pioneer said in a statement.

Pioneer is sinking into the red for the fiscal year ending March 31, racking up a £15 billion (US$145.6 million) loss for charges for restructuring its PDP TV business.

It had previously forecast a £6 billion profit.

The decision to pull out of plasma TV panel production will chalk up a one-time cost of ?19 billion. But Pioneer said it would return to profit for the fiscal year ending March 2010.

Last year, Pioneer announced a capital and operations tie-up with another electronics maker, Sharp Corp, for Pioneer to procure Sharp's liquid crystal displays (LCD) -- the other major technology for flat TVs.

Pioneer said that the partnership was going well. Pioneer is helping develop acoustic systems for new flat TVs and will launch new LCD TVs in Europe this fall and steadily expand its lineup, it said.

Pioneer and Sharp will also work together on Blu-ray disc recorders and players, it said.

Pioneer's decision is just the latest shake-up in Japan's flat-panel business. Last month, Sony Corp and Sharp said they were tying up, with Sony investing in a Sharp plant for making LCDs. Sony already buys LCD panels from Samsung, and the deal with Sharp was on top of that.

In December, Matsushita, Hitachi Ltd and Canon Inc announced a tie-up in their LCD businesses, after Toshiba Corp said it would team up with Sharp to buy LCD panels for Toshiba flat-panel TVs.
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