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Mitsubishi Electric to stop producing large LCDs by 2006

Mitsubishi Electric Corp will phase out production of large liquid crystal displays (LCDs)for televisions and computers by fiscal 2006, because increasing competition is driving down prices of the screens.

Mitsubishi Electric will lower production of large LCDs, which measure more than 15 inches, and raise output for smaller LCDs used in cellular phones and factory equipment, said Koji Kawaharasaki, a spokesman for the Tokyo-based firm.

"Taiwanese and South Korean LCD makers have widened their lead over Japanese companies," said Yoshihide Ohtake, an analyst at Shinko Securities Co who rates Mitsubishi Electric shares "neutral plus."

LG Philips, a Seoul-based venture between Royal Philips Electronics NV of the Netherlands and LG Electronics Inc, in March said it will invest in a 25 trillion won (US$21.8 billion) flat panel complex in South Korea. Samsung Electronics Co is budgeting 20 trillion won over a decade for a flat-screen complex there.

South Korea's Samsung Electronics and Sony Corp teamed up to build a 2.1 trillion won factory that can make screens measuring 40 inches diagonally and larger. Mitsubishi Electric's biggest plant can cut up to about 22 inches, Kawaharasaki said.

Mitsubishi Electric's competitors have bigger factory lines that can produce more panels, "so the way we can differentiate ourselves is by scrapping large LCDs and focusing on adding value to smaller LCDs," he said.

Mitsubishi Electric's large LCD production will fall to about 20 percent of total output, compared with about 65 percent last business year, and the company will stop producing large LCDs by March 31, 2007, he said.

Mitsubishi has developed a liquid display that can handle a wide range of temperatures and plans to produce it within the year for industrial equipment.

The company targets sales of ¥38 billion (US$346 million) for LCDs in the year ending March 31, Kawaha-rasaki said.
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