Panasonic to Reduce Plasma Plant and Scale Back TV Production

Will Panasonic Offer LCDs in Larger Sizes?


Is the plasma TV business in trouble?

Some pundits have been saying that for years, even before Pioneer exited the market in 2008. While there are three major TV manufacturers still producing a lot of plasma TVs (Panasonic, Samsung and LG), one of those three makers is planning to scale back considerably on its output.

That company is Panasonic. A report by Reuters revealed that the company will reduce plasma TV production and cut its workforce by about 1,000 people. The report describes Panasonic’s plasma TV business as a “loss-making television unit.”

Specifically, according to the Reuters story, the company will stop making plasma panels at it’s Amagasaki No 3 factory by the end of March 2012. In addition, the report speculates that Panasonic also plans to sell off an LCD factory.

Part of this is likely a move to reduce redundancies that followed Panasonic’s takeover of Sanyo.

The company may be scaling back on its target of producing 25 million TV sets a year (plasma and LCD combined).

Globally, plasma holds a much smaller market than LCD. According to research firm Displaysearch, 2011 will see a total of 248 million TVs shipped, but only 17 million of those will be plasma.

It’s a curious move because plasma seemed to be making a comeback—throughout 2010 plasma was increasing market share. According to a Displaysearch report in February this year plasma sales grew 9 percent over 2009. In 2010, Panasonic was leading the charge holding 40 percent of the market, with Samsung and LG following in that order.

However, plasma demand began to drop mid-year with an estimated decline of 6 percent.

So, assuming the Reuters report is correct, what’s up?

The company’s latest VT30 plasma TV (EH will post a review soon) has been seen as the TV to beat in terms of pure picture quality. It’s the TV that the new Sharp Elite TVs will be compared to.

People who know picture quality also know that plasma delivers to best image. Plasma TVs also tend to be less expensive than an equivalent-sized premium LCD TV. LCDs can be thinner and lighter, and have some other benefits, but plasma development has done a good job of keeping the technology relevant.

Or has LG’s push toward passive 3D (currently only available on LED LCD technology) begun to steer more people away from plasma? Or has the Elite Effect begun with the launch of those sets (dealers I’ve talked to tell me that the new Elite TVs, despite their high price, are selling well)? Will Panasonic start offering LED LCD TVs in larger sizes (currently Panasonic’s largest LED LCD TV is 42 inches)?

We may have to wait until January’s CES show to find out.


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