Pioneer to stop making plasma panels?

[lcaillo]

Pioneer to end plasma panel output, source says...

By Kentaro Hamada

TOKYO (Reuters) - Japan's Pioneer Corp is finalizing plans to stop all production of plasma display panels in a bid to turn around its loss-making flat TV operations, an industry source briefed on the plan said on Tuesday.

Shares in the maker of audio-visual products and auto electronics jumped to a four-month high after first reports of the move, and were up 11.2 percent at 1,160 yen as of 12:50 a.m. EST.

Pioneer is the world's fifth-biggest plasma TV maker, but it has been struggling to compete with larger rivals with better output efficiency such as Matsushita Electric Industrial Co, maker of Panasonic-brand electronics.

After the move, Pioneer plans to buy plasma panels for flat TVs from Matsushita, the Nikkei business daily reported. Pioneer is already planning to buy liquid crystal display panels from Sharp Corp to start offering LCD TVs.

"This is an excellent development," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.

"Pioneer could have chosen another way and stepped up its plasma investment despite the fact that the business is bleeding red ink, but it's a wise step to decide against that," he said.

"A quicker decision would have been even better, though."

Pioneer has spent a little over 100 billion yen to build four plasma panel production lines and to buy two more lines from NEC Corp.

Japanese TV makers have been undergoing a realignment as top manufacturers with ample output capacity such as Matsushita and Sharp look for panel buyers, while mid-tier players seek ways to obtain display panels without making hefty initial investments.

A Pioneer spokesman said the company would unveil its display business strategy when it announces company wide business plans on Friday.

To fight price declines, Pioneer last year launched its "Kuro" series, positioning the TVs as premium products. Executives had said the brand was gaining momentum and would translate into bigger sales in 2008.

Pioneer aims to sell 480,000 plasma TVs in the business year that ends this month, less than one-10th of Matsushita's sales target of 5 million units.

Withdrawing from the panel business implies the firm will close its panel plant in Kagoshima in southwest Japan, but Pioneer is studying ways to avoid shutting the factory, the source said.

(Reporting by Mayumi Negishi, Edwina Gibbs and Kiyoshi Takenaka; Editing by Hugh Lawson)

Source: Reuters

[imbeaujp]

What a bad news... Pioneer is the best plasma on the market !

[blownrx7]

Another site has stated (in Banners I might add) that this signals the death knell for plasma displays a-la HD-DVD. Is it???

The only positive out of this (I hope) is that Kuro displays will start going at fire-sale prices...

[lcaillo]

I purposely did not post that link, because it was more hyperbole than fact. IMO, such reporting does not serve the industry well. It draws a conclusion in the headlines that may or may not be based in fact.

The facts here are that the 5th largest maker of PDP glass has not been competitive enough to make money. They say that they will continue to sell PDPs based on Panasonic glass. The longer term prospects for PDP do not seem to be very good, IMO, but this news alone certainly does not imply that the technology is doomed in the short term. In fact, it may make Panasonic's operations more likely to be profitable. With Pioneer having a performance orientation compared to Panasonic, they may figure out how to make the Panasonic panels perform better and may demand better of them. This may well help the PDP business over the next couple of generations of sets. Beyond that is more uncertain.

That is just my opinion, just like the article that states PDP is dead is just an opinion. The facts at this time indicate much faster growth for LCD, but whether PDP will find a sustained market that is profitable enough to keep factories open over the long term is not clear at this time.

Come to the shack for a clear deliniation of what is fact and what is opinion or speculation. Even here, read with a critical mind. Sorting out the hype is tough in this industry. We try to relate information as best we can with an open mind. Remember, the banners are ads and the reason that we have them is that they are selling something.

[mmountainbiker]

Why would they try to phase out plasmas. I thought thier PQ was better than lcd?

[lcaillo]

PDPs are expensive to build relative to LCD, have higher power demands, use more high current semiconductors, and have phosphors that age. LCDs are generally more stable. The image quality in LCD panels has improved dramatically in recent years, to the point where they are very competitive in quality. You have pros and cons in both. Manufacturers looking to build new plants are not likely to build PDP plants with all of the issues mentioned above.

[Mike P.]

Why would they try to phase out plasmas. I thought thier PQ was better than lcd?

The issue is about economics, not picture quality.

[imbeaujp]

Pioneer does not stop his plasma line, the will use Panasonic facility. Panasonic will build the panel according with Pioneer specs and the process will be monitored by Pioneer's engeneer in a panasonic plant.

Once the panel made, Pioneer will add their proprietary electronics and optic treatment. This is not the end of Pioneer Elite Plasma, this is an outsoucing agreement for panel components.

This is not a bad news, by using a more efficient plant, Pioneer will delivers high quality plasmas at a lower cost.

Plasma still remain the best panel technology to date, and that agreement improve the ability to compete with LCD low cost.

[lcaillo]

If you have any more current resources with information regarding the degree to which Pioneer will be providing their own electronics support to the Panasonic panels, or the more specific nature of the trading of panel manufacturing technology, please post it. For now, most of the details about the product that will come out of this cooperation is speculation. We could see similar differences that we have had in the past or products that are more similar. One thing that is likely to continue is the Pioneer continuing to be more easily calibrated to standards in the Elite products.