Pioneer reviews plasma business

Pioneer is planning to cease production of plasma display panels. The decision is part of the company’s efforts to turn around its loss-making flat TV operations.

The company has been struggling to compete with larger rivals, including Matsushita Electric Industrial Co, which manufactures the Panasonic brand.

Pioneer will keep building Plasma TVs, but will buy the panels from Matsushita. It has invested over 100 billion yen to build four plasma panel production lines and to buy two more lines from NEC Corp.

The company also plans to start offering LCD TVs and will buy LCD panels from Sharp Corp.

Pioneer’s plans are in line with a general trend in the industry for leading manufacturers, such as Matsushita and Sharp, which have more than enough output capacity, to sell panels to mid-tier companies who want to avoid the substantial investment required to manufacture the panels themselves.

Pioneer’s target is to sell 480,000 plasma TVs in its fiscal year to March 2008, less than one-10th of Matsushita’s sales target of 5 million units.

Pioneer will reveal details of its display business strategy when it announces companywide business plans on Friday.