Panasonic said Tuesday it will sell one of its main domestic TV panel factories to a new joint venture focused on producing smaller screens, as Japan's big-name manufacturers continue to seek relief from deep losses in their display businesses.
The move comes as part of a broader restructuring plan for Panasonic's overall television business, which like its peers' is deeply in the red. The company said last month it would scale back its manufacturing in an attempt to become profitable by next fiscal year. After the sale, which is to be finalized in April of 2012, it will have one domestic plant remaining.
Japan Display, the new venture that will acquire the factory, will be comprised of the small display subsidiaries of Hitachi, Sony and Toshiba, backed by a US$2.6 billion investment from a government-funded investment firm, Innovation Network Corporation of Japan (INCJ). The companies said Tuesday they had finalized plans to launch the new company in Spring of next year, as earlier announced.
Panasonic said it will sell its LCD TV factory located in Chiba, east of Tokyo to Japan Display for an undisclosed sum. INCJ said the new venture will build a new production line for small displays at the factory, it said Tuesday.
Japan's prominent electronics companies are struggling to revive their TV and panel businesses, under pressure from recent record highs in the yen and foreign competition from rivals like Samsung and Vizio. Sony said earlier this month it now expects over a billion-dollar loss for the current fiscal year, after early predicting a profit, due in large part to its television woes.
With panels largely commoditized, domestic manufacturers have attempted to increase profits through technologies that offer glasses-free 3D and super high resolution, but have had little success so far.
Sharp is revamping some of its large-screen TV lines to make smaller panels for phones and tablets, a transformation similar to that planned at the Panasonic plant, although Sharp is making its changes internally.