* Company to take 40 bln yen impairment charge - sources
* Move earlier than expected, restructuring picks up speed
* TV business has been major contributor to net losses
By Reiji Murai
TOKYO, Oct 9 Panasonic Corp will pull
out of the plasma television panel business by the end of the
financial year to March 2014, sources familiar with the
situation told Reuters, marking a key milestone in the long-term
decline of Japan's TV industry.
Panasonic had been widely expected to back out of the
unprofitable business, but the exit comes sooner than predicted
and underlines President Kazuhiro Tsuga's determination to weed
out weak operations as he focuses on higher-margin products to
end years of losses at the consumer electronics conglomerate.
Panasonic's TV division has been a major contributor to the
electronics company's combined $15 billion net loss in its two
latest financial years. Its TV business posted an operating loss
of 88.5 billion yen ($913 million) in the last financial year.
With the closure of its sole plasma panel factory in western
Japan, Panasonic will book an impairment loss of more than 40
billion yen on the last remaining factory building in operation,
the sources added. The company set aside 120 billion yen to
cover restructuring costs at the start of the current financial
The move also signals the demise in Japan of a technology in
which TV makers once invested heavily but has now been overtaken
by advances in the liquid crystal display (LCD) business. Plasma
display TVs accounted for less than 6 percent of global
shipments in 2012, compared with 87 percent for LCD TVs,
according to research firm DisplaySearch.
Squeezed by the strong yen in recent years, Japan's TV
makers have also lost their innovative edge against nimbler
rivals such as South Korea's Samsung Electronics Co Ltd
, with deep resources to spend on research and
Sony Corp, Panasonic and Sharp Corp
combined had a less than 20 percent share of the worldwide flat
panel TV market by revenue. Samsung had a 27.7 percent share,
and LG Electronics Inc had 15 percent.
Panasonic said in a statement on Wednesday that it continued
to consider various options for the plasma display panel
business but that nothing had been decided yet.
The several hundred employees in Panasonic's plasma
operation are expected to be deployed to other parts of the
company, the sources said.
The move is in line with the strategy adopted by company
President Tsuga since he took charge in June 2012. Panasonic is
trying to engineer a turnaround away from low-margin consumer
electronics goods to products catering to automakers and other
Tsuga has warned that he would weed out any division that
fails to meet a 5 percent operating margin goal within three
years. Non-core assets like its healthcare unit are also being
sold as he overhauls the company.
Panasonic agreed last month to sell the healthcare business,
which makes blood sugar monitoring devices and electronic
record-keeping systems, to U.S. private equity firm KKR & Co
in a $1.67 billion deal.
Shares in Panasonic were down 0.2 percent at 913 yen in
morning trade in Tokyo, in line with a 0.3 percent slip in the
benchmark Nikkei average.