Hitachi sees earlier start to plasma display plant

TOKYO (Reuters) - A unit of Hitachi Ltd said on Wednesday it will bring forward the start of mass production at a new plasma display factory in western Japan by three months to October 2006 to meet strong demand.

Fujitsu Hitachi Plasma Display (FHP), a venture owned 80.1 percent by Hitachi and 19.9 percent by Fujitsu Ltd, also announced that it had developed the world's first 42-inch plasma panel that meets full high-definition (HD) specifications.

FHP said the 85 billion yen (US$703.8 million) plant in Miyazaki prefecture would come on-line next October with an initial monthly capacity of 100,000 plasma panels, raising overall capacity to 200,000 including another plant in Miyazaki.

Hitachi, which earlier this year raised its stake in FHP from 50 percent, is targeting plasma displays as a growth area, expecting consumers to continue snapping up flat-panel TVs to replace bulkier cathode-ray tube models.

The new plant is expected to exacerbate overcapacity of plasma panels in the market, however, with South Korea's LG Electronics and Matsushita Electric Industrial Co Ltd also planning big output increases next year.

Overcapacity has helped push panel and TV prices lower, pinning FHP and several other players in the red.

FHP said it would start mass producing the new full HD panel, which is able to produce images at the highest standard of 1,920 by 1,080 pixels of resolution, by spring 2007. Ahead of that, it plans to launch a 55-inch full HD panel in summer of next year.

Flat-screen makers are racing to develop full HD panels, expecting the spread of terrestrial digital broadcasting to spur on demand for TVs able to reproduce high-definition images.

Sharp and other liquid crystal display (LCD) makers have been leading that race because it is easier to make full HD panels using LCD technology. Sharp has a full line-up of large, full HD LCD TVs ranging from 37 to 65-inch models.

Hurdles inherent in plasma technology have prevented plasma makers from introducing a full HD panel for the 40- or 50-inch ranges, although Matsushita launched a full HD 65-inch plasma TV in November and is developing a panel for the 50-60 inch range.

FHP, the world's fourth-largest plasma panel maker after LG, Samsung SDI and Matsushita, said it planned to ship 900,000 plasma panels in the business year to next March, accounting for 15 percent of the global market.