Panasonic in talks with Hitachi, to switch to LCD TVs

Panasonic's parent brand Matsushita is holding discussions with its frequent rival Hitachi that could permanently alter the HDTV business, according to a source speaking with Nikkei Business Daily (registration required). The former company is allegedly set along with Canon to take control of a joint LCD development project shared with Hitachi and Toshiba, giving it a far greater stake in the TV technology than it has to date. In return, the deal would help Hitachi offload the more unprofitable parts of its LCD business, which have left it struggling to compete with companies more dedicated towards HDTVs.

The deal would also have Matsushita build a $2.7 billion dollar eighth-generation LCD manufacturing plant that would produce larger, higher-quality screens, improving the quality both of its Panasonic LCDs and for partners. The venture may also allow investments in future OLED screens that would be far thinner and more color-rich, says the Japanese trade paper.

Panasonic has already produced LCD sets in the past but is widely believed to have made a mistake by placing a far greater emphasis on plasma TVs, locking the company into a focus on larger and frequently more expensive sets while LCDs have both controlled the small-screen field and increased in size, undercutting the price of plasma while offering similar quality. A switch by Panasonic to LCDs would leave the field to smaller firms such as Pioneer or to expansive firms like Samsung, which can afford to produce plasmas as a subset of a larger LCD business.

Canon, Hitachi, and Matsushita have not denied the possibility of the deal but note that nothing has been firmly decided.

Filed under: industry
Other story tags: Panasonic, Canon, Hitachi, Matsushita