Plasma-Screen Makers: Don't Write Off Format Just Yet

Plasma television technology has a bright future despite an onslaught on its home turf from rival LCD (liquid crystal display) TVs, makers of plasma screens told Reuters at the IFA consumer electronics fair in Berlin.

Last year, four times as many LCD TVs as plasma TVs were sold, according to research firm iSuppli, which predicts that ratio will leap to seven to one this year, as LCD encroaches on plasma's traditional territory of larger screens.

But Matsushita, whose Panasonic brand TVs are the world's best-selling plasma televisions, believes it can fend off LCD's advance through a combination of quality improvements, cost-cutting and better power efficiency.

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Hiro Wada, who is in charge of planning for visual products and display devices at Panasonic, said he believed plasma could maintain a share of at least 30 percent of the market for flat-screen TVs bigger than 37 inches in the medium term.

"We have a chance because demand for bigger screens is increasing," Wada told Reuters in an interview at IFA. He said Matsushita, which is investing $1.5 billion in a plasma panel factory in Japan, aimed to stay number one in the plasma market.

He added that plasma technology, which has only been commercial for about 10 years, still had plenty of room to improve. LCD television technology has been commercial for more than 30 years.

He also said Panasonic aimed to reduce the power consumption of its sets by about 20 percent per year.

Plasma, a self-illuminating system, uses electricity to excite tiny pockets of gases sandwiched between two panes of glass to produce light, giving natural-looking images with high contrast that look good from different viewing angles.

LCD is backlit and its crystals produce colors by blocking varying amounts of light. It is generally more energy efficient than plasma and can be powered by batteries, making it widely used in phone and digital camera displays.

Wada said Panasonic was working on improving luminous efficiency, which would bring down power consumption, and was also cutting production costs through single-scan technology, which uses one instead of two chips to drive the display.

Makers of all kinds of TVs are locked in a price war, and plasma makers are under more pressure than ever as LCD makers advance on their territory of higher-margin large screens.

Wada said he believed prices for TVs with screens of 37 inches and above would fall by 30 percent this year and about the same next year.

ISuppli forecasts total global plasma screen revenues will peak next year at $10.2 billion.

Samsung, the world's second-biggest maker of plasma screens, showed off some new LCD televisions but did not present any new plasma models at IFA.

LG Electronics' digital display business chief told Reuters at IFA that LG would stay in the plasma business for the long term, despite some investors urging it to sell or shut down the loss-making unit.

Simon Kang said price falls were slowing amid tight supply but forecast that prices would still be 30-35 percent lower this year after a steep first-half decline. Prices should fall less by next year, he said in an interview.

Kang said he was not at the moment considering a joint venture or other form of cooperation for LG's plasma business, the world's second biggest, amid consolidation in the industry, preferring to strengthen LG's own business first.

"We are optimistic. Plasma also has its fans," he said.

The IFA consumer electronics fair runs until September 5.