Hitachi to delay decision on next plasma plant

A Hitachi employee presents a plasma TV at an unveiling in Tokyo April 4, 2006. Japan's Hitachi Ltd. said on Monday it would postpone a decision on building its next plasma display factory, as prices fall and demand slackens.

TOKYO (Reuters) - Japan's Hitachi Ltd. (6501.T) said on Monday it would postpone a decision on building its next plasma display factory, as prices fall and demand slackens.

Hitachi, which is trying to keep up with plasma TV leader Matsushita Electric Industrial Co. (6752.T) and other flat TV makers, said it would reach a decision on the new plant by the year-end, instead of by March, in the latest delay caused by brutal price declines in the flat TV industry.

Hitachi, the world's No. 5 plasma TV maker, would be able to meet demand by doubling capacity through its two existing plants in Miyazaki, southwest Japan, to an annual 4 million panels by December, Hitachi spokesman Masayuki Takeuchi said.

Plasma TV prices have been under heavy pressure from liquid crystal display (LCD) TV makers, like Samsung Electronics Co. Ltd (005930.KS) and LG.Philips LCD Co. Ltd. (034220.KS), with the price falls hurting smaller manufacturers without Matsushita's capacity volume.

Last week, rival Pioneer Corp. (6773.T), the world's No. 6 plasma TV maker, said it would postpone planned construction of a new plasma display factory and lowered its full-year operating profit forecast.

Hitachi shares dropped 2.0 percent to 796 yen in morning trade compared with the benchmark Nikkei average .N225 which fell 0.91 percent.