Tech Features

Boom in flat-screen TVs prompt Japanese makers to gear up production

By Lars Nicolaysen Jan 11, 2006, 15:18 GMT

A visitors looks at the first 102 inch or 255 centimetre Plasma TV, made by Samsungat the Consumer Electronics Show in Las Vegas, Nevada, on Friday 06 January 2006. A dozen industries are convening in Las Vegas this week for the industry\'s annual Consumer Electronics Show to display the latest electronic gadgets EPA/BARRY SWEET

Tokyo - In light of a dramatic rise in demand for flat-screen televisions, Japan's leading manufacturers in consumer electronics are massively supplementing their investments in the sector.

The makers of LCD and plasma televisions are battling for market dominance, and the top manufacturers of both kinds of TV sets have announced new offensives in the flat-screen television war.

Sharp, the leading maker of liquid-crystal displays, or LCDs, said Wednesday that it will quadruple its annual production to 20 million units in the 2008 fiscal year, which ends March 31, 2009.

Earlier, the leading consumer-electronics maker, Matsushita Electric, which makes Panasonic televisions, said it will build the world's largest plasma production facility at home in Japan to substantially increase its turnout of the TVs.

The announcements came as a new technology was soon expected from Canon and Toshiba that will usher in a new generation of flat-screen panels.

Matsushita's 180-billion-yen (1.57-billion-dollar) plant is to go into operation in July 2007. Matsushita said that when it reaches its full production capacity in the 2008 fiscal year, which begins April 1, 2008, it will spit out 500,000 plasma displays per month.

By the end of the 2008 fiscal year, Matsushita said it expected the plasma-panel production capacity at its four factories in Japan and one in Shanghai to more than double from their current capacity to 11.1 million units annually.

Matsushita, taking a different tack from Sharp and Sony, is betting not on flat-screen televisions with liquid-crystal displays but on plasma, or PDP, screens. Unlike other companies, Matsushita is seeing annual profits of 30 to 40 per cent in the televisions despite rapid price declines.

Plasma technology provides technical advantages in the production of large-screen TVs in performance, quick production and cost-efficiency, said Ken Morita, the president of Matsushita PDP Co., a joint venture between Matsushita and the chemical company Toray Industries.

Plasma displays have developed from Japan into an enormous global market, thanks to digital, high-definition television. Morita said he expected the popularity of the screens to only rise as demand for multipurpose monitors in business, education and medicine also rises.

Panasonic said it expected the global plasma market to grow to 25 million units by 2010.

With its new production facility, Matsushita said it wanted to strengthen its number 1 place in the industry and increase its global market share to at least 40 per cent.

Matsushita's closest plasma competitor, South Korea's LG Electronics, also plans to build another factory in the second half of this year, according to the financial newspaper Nihon Keizai Shimbun.

It aims to increase its monthly production capacity from a current 310,000 to at least 555,000, the paper reported.

Their number 3 competitor, South Korea's Samsung Electronics, was also considering how to increase its current capacity of 250,000 TVs a month, it said.

Pioneer is taking a different strategy. Because of flagging sales, it plans to reduce its production of plasma screens, but another Japanese company, Hitachi, whose global market share of plasma TVs lies under 10 per cent, intends to better its position by specializing on high-definition models, Nihon Keizai Shimbun said.

As these companies and plasma and LCD screens battle for market dominance, Canon and Toshiba plan to soon introduce a new technology to the mix.

Their new screens are to feature a high contrast ratio but use significantly less electricity than an LCD display.

Toshiba plans to bring its flat screen called SED, or surface conduction electron emitter displays, on the market early this year.