Panasonic Races to Meet Plasma Demand

Matsushita Electric Industrial, also known as Panasonic, is expanding its production of plasma display panels faster than originally planned to keep pace with strong demand for PDP flat-panel televisions, a company executive says.

The expansion is part of Panasonic's aim to become the world's largest maker of PDPs by mid-2006, says Tsutomu Ueda, senior vice president of Panasonic's AVC networks company, at its plant in Ibaraki City in western Japan.

The company's PDP subsidiary, Matsushita Plasma Display Panel, has installed new production lines at the Ibaraki plant, raising its production capacity to 100,000 panels per month. When the factory opened in April it had a production capacity of 40,000 panels per month. Panasonic's original plan had been to expand this to 80,000 by April 2005.

Supply and Demand

One of the main factors behind the faster- and larger-than-planned increase is the growing popularity of PDP-based flat-screen televisions. Demand for the sets is strong in Japan, the United States, and Europe, says Ueda.

In the first 10 months of this year, shipments of PDP televisions in Japan totaled 245,000 units, up 46 percent from the same period in 2003, according to the Japan Electronics and Information Technology Industries Assocation. Panasonic estimates its share of the Japanese market rose from 26 percent in late September to 40 percent at the beginning of December. Its share in the United States rose from 24 percent to 28 percent over the same period, it says.

Matsushita estimates global demand for PDPs will reach 2.7 million units for the 12-month period ending March 2005, exceed 5 million units in the year to March 2006, and reach 12 million units in the year to March 2009.

The latest increase takes Panasonic's total production capacity, including its first Japanese factory and a plant in Shanghai, China, to 150,000 panels per month.

Its next major increase in production is due in late 2005, when the first of two production lines at a new plant in Amagasaki, Japan, come on line. That will take capacity from 1.8 million panels per year to 3.3 million panels per year. At the beginning of 2007 a second line is expected to have pushed total capacity to 4.8 million panels per year.

"Bearing in mind that we are quadrupling production over the next three to four years, it shows how we perceive the market," says Ueda. "Even after the year-end sales period we see demand without end."