Matsushita, Hitachi join forces in plasma screens

Tokyo, May 24: Matsushita Electric Industrial Co. Ltd. and Hitachi Ltd. are joining forces to battle fierce competition in the flat screen industry by adding each others' plasma display panels to their product line-up.

Under the agreement, Panasonic maker Matsushita will start supplying Hitachi with 103-inch panels in the current business year to March 2008, while Hitachi will begin providing Matsushita with 85-inch panels next business year.

Matsushita, the world's largest plasma TV supplier, said it was not clear at the moment how much annual revenues the new deal with Hitachi would generate.

Plasma TVs, which once dominated the 40-inch-and-larger market, have lost ground as rival LCD TV makers have rolled out bigger models at cheaper prices, prompting analysts to urge closer ties between plasma makers to better compete with the LCD camp.

Global LCD TV sales grew 54 percent from a year ago to $13.6 billion in the latest quarter, while plasma TV sales fell 9 percent to $3.6 billion, according to research firm DisplaySearch.

The announcement by Matsushita and Hitachi follows news last week that South Korean flat panel makers including LG Electronics Inc. and Samsung Electronics Co. Ltd. are forming an alliance to enhance their competitiveness.

Ahead of the panel supply announcement, shares in Matsushita closed up 0.4 percent at 2,535 yen while Hitachi gained 2.5 percent to 888 yen, outperforming the Nikkei average <.n225>, which was virtually unchanged.

Reuters