UPDATE 1-LG Elec still looking for plasma partner-CEO

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SEOUL, March 14 (Reuters) - LG Electronics Inc (066570.KS) is still looking for possible investment partners for its plasma screen business, its chief executive said on Friday.

"The plasma market is shrinking but profitability is improving," CEO Nam Yong said, reiterating that the loss-making division, which makes plasma screens and television sets, would turn around during the first half of the year.

Nam also said the company was not planning to raise or reduce its current 37.9 percent stake in liquid crystal display maker LG Display (034220.KS). Dutch electronics giant Philips (PHG.AS) earlier this week cut its stake in LG Display to 13.2 percent from just under 20 percent.

LG's 2008 earnings outlook appears bright despite the slowing U.S. economy, with its LCD screen joint venture set to benefit from a TV panel shortage and LG's premium phones posting strong sales.

Along with robust flat-screen TV sales, the firm's plasma screen business, which posted steep losses last year, is expected to improve on surging demand ahead of this summer's Beijing Olympics. LG earlier this year predicted it would post a single digit operating profit margin for the display division by the end of the year.

In contrast to LG's bullish views, Japanese rival Pioneer Corp (6773.T) is finalising plans to stop all plasma display panel production, according to an industry source.

"We will continue (the plasma business) as long as it generates cash," Nam told reporters on the sideline of an annual shareholder meeting.

Nam also said the company was not interested in acquiring a stake in Hynix Semiconductor inc (000660.KS), the world's second-biggest memory chip maker, majority owned by domestic banks.

"We've learned to live without having a semiconductor business," Nam said.

Nam reiterated the company's intent to increase outsourcing and focus on research, marketing and new businesses such as energy.

Shares in LG rose 2.27 percent to 112,500 won by 0141 GMT, outperforming the wider market's 0.7 percent rise.

(Reporting by Rhee So-eui and Marie-France Han, Editing by Keiron Henderson)