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By: Richard Del Cazzo
Web site: http://www.hdtv-hdtv.com
Pioneer Corp., vying for leadership in the plasma display
market as it quadruples capacity, will accelerate the start
of a production line by more than a month to meet demand for
flat screen televisions, company president Kaneo Ito said.
Pioneer is moving forward expansion for the second time in
six months to remain competitive. ``We will start mass production
by the end of this year at the latest,'' Ito said in an interview.
The earlier plan was for a January, 2005, start.
Surging global demand for flat screen televisions has forced
Pioneer into a race for capacity against bigger rivals such
as Matsushita Electric Industrial Co. and Suwon, South Korea-based
Samsung Electronics Co. Ito in February said Tokyo-based Pioneer's
purchase of NEC Corp.'s plasma display operations was needed
to ensure survival in the market as competition increased.
``An earlier start gives Pioneer more time to lower production
costs before the following holiday shopping season,'' said
Daiwa Institute of Research analyst Kazuharu Miura, who has
a ``neutral'' rating on the stock. Bottom-line benefits will
only be visible after the business year beginning April 2005,
he added.
Shares of Pioneer rose 0.9 percent to 3,210 yen as of the
3 p.m. close on the Tokyo Stock Exchange. They have risen
41 percent in the past 12 months, lagging the 57 percent rise
in the Topix Electrical Machinery Index of Japanese electrical
and electronic appliance makers.
Pioneer sold 160,000 flat screen plasma television sets under
its own brand in the year to March 31, almost all that it
was able to make, Ito said. The company also makes plasma
monitors used in airports and stores.
Pioneer needs to add capacity, ``but I'm concerned we may
be seeing overheated demand for flat-screen TVs, which could
be temporary,'' said Masayuki Ito, who helps manage the equivalent
of $189 million in Japanese equities at Ikegin Investment
Management Co. in Osaka, Japan. He does not hold Pioneer shares.
The company in January raised its estimate for the industry's
global plasma panel sales. For the year ending March 2006,
demand is expected to rise to 3.65 million units, up 62 percent
from the year ago period and up 4.3 percent from the initial
forecast. The Summer Olympics in August and the European soccer
championship in June will also help boost sales.
Flat-screen TV prices are declining quickly, making it important
for manufacturers to maintain or add market share. ``Plasma
TV prices fell 10,000 yen in a week during the last holiday
shopping season in Japan,'' according to Pioneer's president
Ito. The company also intends to lower costs by improving
technology and using less parts.
Pioneer's production line being built in Yamanashi prefecture,
about 150 kilometers west of Tokyo, will have annual capacity
of 300,000 panels. With that factory open, total capacity,
including NEC's facilities, will grow to 1.1 million panels,
or more than quadruple Pioneer's present capacity.
Ito said bringing the start date forward is possible because
Pioneer persuaded the construction company to complete building
ahead of schedule, and Pioneer has secured shorter delivery
times from equipment manufacturers.
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