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Investment cut as TV sales fall flat
Source: Agencies |
January 10, 2009, Saturday
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Print Edition
PANASONIC is to cut its planned investment in factories that make flat-screen TVs after a global fall in demand for high-end electronics.
The electronics giant is to cut about 100 billion yen (US$1.1 billion) from its previous investment target of 580 billion in two new TV panel factories in Japan, Kyodo News reported.
As TV sales have fallen below target, the company has decided that increasing capacity to previously planned levels would lead to excess capacity, according to broadcaster NHK.
A Panasonic spokesman declined to comment ahead of a press conference which was due to be held in Tokyo last night.
Panasonic is one of the world's largest TV makers. It makes flat-screen TVs based on both plasma and liquid crystal display technology, and is ramping up production to keep up with domestic rivals such as Sharp and Sony.
As tough competition drives down the price of TVs, manufacturers have poured funds into their production capacity to leverage economies of scale.
But that strategy can backfire if overall sales decline.
Panasonic is also in the midst of a US$9-billion takeover of Japanese rival Sanyo, hoping that transforming itself into one of the world's biggest electronics companies will help it weather the current tough environment.
The electronics giant is to cut about 100 billion yen (US$1.1 billion) from its previous investment target of 580 billion in two new TV panel factories in Japan, Kyodo News reported.
As TV sales have fallen below target, the company has decided that increasing capacity to previously planned levels would lead to excess capacity, according to broadcaster NHK.
A Panasonic spokesman declined to comment ahead of a press conference which was due to be held in Tokyo last night.
Panasonic is one of the world's largest TV makers. It makes flat-screen TVs based on both plasma and liquid crystal display technology, and is ramping up production to keep up with domestic rivals such as Sharp and Sony.
As tough competition drives down the price of TVs, manufacturers have poured funds into their production capacity to leverage economies of scale.
But that strategy can backfire if overall sales decline.
Panasonic is also in the midst of a US$9-billion takeover of Japanese rival Sanyo, hoping that transforming itself into one of the world's biggest electronics companies will help it weather the current tough environment.
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