Pioneer to end plasma panel output, source says

By Kentaro Hamada

TOKYO (Reuters) - Japan's Pioneer Corp (6773.T: Quote, Profile, Research, Stock Buzz) is finalizing plans to stop all production of plasma display panels in a bid to turn around its loss-making flat TV operations, an industry source briefed on the plan said on Tuesday.

Shares in the maker of audio-visual products and auto electronics jumped to a four-month high after first reports of the move, and were up 11.2 percent at 1,160 yen as of 12:50 a.m. EST.

Pioneer is the world's fifth-biggest plasma TV maker, but it has been struggling to compete with larger rivals with better output efficiency such as Matsushita Electric Industrial Co (6752.T: Quote, Profile, Research, Stock Buzz), maker of Panasonic-brand electronics.

After the move, Pioneer plans to buy plasma panels for flat TVs from Matsushita, the Nikkei business daily reported. Pioneer is already planning to buy liquid crystal display panels from Sharp Corp (6753.T: Quote, Profile, Research, Stock Buzz) to start offering LCD TVs.

"This is an excellent development," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.

"Pioneer could have chosen another way and stepped up its plasma investment despite the fact that the business is bleeding red ink, but it's a wise step to decide against that," he said.

"A quicker decision would have been even better, though."

Pioneer has spent a little over 100 billion yen to build four plasma panel production lines and to buy two more lines from NEC Corp (6701.T: Quote, Profile, Research, Stock Buzz).