Panasonic Corp to pull out of plasma television panel business: Reports
10 October 2013
Panasonic Corp is set to pull out the plasma television panel business by the end of its financial year in March 2014, Reuters reported citing sources familiar with the situation.
The move marks a key milestone in declining fortunes of Japan's TV industry.
The company had been widely expected to pull out of the unprofitable business, though the exit comes sooner than predicted.
The exit from the plasma television panel business underlines president Kazuhiro Tsuga's determination to exit weak businesses and focus on higher-margin products to end continued losses at the consumer electronics conglomerate.
The company's TV division has been a major contributor to the combined $15 billion net loss of the company in its two latest financial years.
The last financial year saw the TV business post an operating loss of ¥88.5 billion.
With the closure of its sole plasma panel factory in western Japan, Panasonic will book an impairment loss of over ¥40 billion on the last remaining factory building in operation, according to the sources.
The company had earmarked ¥120 billion to cover restructuring costs at the start of the current financial year.
The planned exit also marks the demise of plasma technology that once attracted heavy investments but had now been overtaken by the liquid crystal displays as less than 6 per cent of global shipments in 2012 were of plasma display TVs as against 87 per cent for LCD TVs, reveals research firm DisplaySearch.
Several companies including Hitachi and Pioneer, have already pulled out of the plasma TV sector.
Panasonics' move comes despite the critical acclaim its plasma TVs have received, notably from the European Imaging Sound Association, which voted Panasonic's Viera TX-P60ZT65 European home cinema TV of the year 2013-2014.
Plasma screens, use electrically charged ionised gases, which impart better colour rendering capability, but consume greater electricity than other screen technologies.
Panasonic, as also domestic rivals Sharp and Sony are finding it difficult to cope with falling electronics prices coupled with stiff competition from South Korean and Taiwanese manufacturers.