UPDATE 1-Pioneer to delay building new plasma plant -paper
(Adds company response, share price)
TOKYO, Jan 31 (Reuters) - Japan's Pioneer Corp. (6773.T) will delay the construction of a new plasma panel plant after judging it would be tough to recoup its investment amid falling prices, the Mainichi daily reported on Wednesday.
The paper said Pioneer planned to begin building the plant in Yamanashi prefecture, west of Tokyo, by the end of this year and to start production there before the 2008 Olympics in Beijing. It said the company would announce the delay on Wednesday.
Pioneer spokeswoman Michiko Kadoi declined to comment on the report but said the company plans to discuss the plant when it announces quarterly earnings later in the day. She declined to elaborate.
Demand for flat screen TVs is expected to grow rapidly in the coming years as people trade in bulky cathode-ray tube models for sleek big-screen sets. But the flat TV market has seen steep price erosion as global electronics giants try to outsell one another.
Pioneer, whose plasma TV output capacity lags far behind that of industry leader Matsushita Electric Industrial Co. Ltd. (6752.T), the maker of Panasonic brand electronics, is having a tough time tackling price declines because of a lack of economies of scale.
Tom Haga, head of Pioneer's North American operations, told Reuters earlier this month that one option for the electronics maker would be to quit its own plasma panel production and start to buy key components for plasma TVs from outside manufacturers.
Shares in Pioneer were up 0.4 percent at 1,638 yen as of 0041 GMT, while the benchmark Nikkei average .N225 fell 0.22 percent.
