Panasonic Corp. said Friday it will slash planned capital investment in two new plants to make panels for flat-screen TVs by ¥135 billion to a total of ¥445 billion, as the global recession slows demand.
The Osaka-based electronics giant had initially planned to spend a combined ¥580 billion until 2012 on the two plants in Hyogo Prefecture.
One plant is located in the city of Amagasaki and will manufacture plasma TV panels, while the other, in the city of Himeji, is to produce liquid crystal display panels.
“The pace of the market expansion is slowing,” President Fumio Otsubo told reporters.
The scheduled start of plant operations may be delayed, he added. The Amagasaki plant was set to start up in May and the one at Himeji was planned to open next January.
However, Panasonic still forecasts that the flat-screen TV market will keep growing, albeit at a slower pace, Otsubo said.
Panasonic revealed Friday a target to increase sales of high-end TVs by 50 percent to 15.5 million units for the next business year to March 2010.
“We will respond to a slowdown in the market, but at the same time, aim at growth above industrial average,” Otsubo said.
He added he hopes Panasonic will continue to log double-digit growth in its sales in emerging markets, including Brazil, Russia, India, China and Vietnam.
Meanwhile, to cope with the global recession and rapid decline in the digital electronics market, Panasonic will streamline business sectors and product categories that have been in the red since business 2006.
Also, Panasonic has said it will focus on its rechargeable battery business.
It announced Dec. 19 it will launch a tender offer to acquire a 70.5 percent stake in smaller rival Sanyo Electric Co., which is the world’s largest supplier of lithium-ion batteries.