TOKYO: Panasonic Corp will drop a plan to convert a television panel plant in Japan into a solar panel factory, hit by an industry price war and a strong yen that is making exports less competitive, a source with direct knowledge of the matter said.
Panasonic is also in talks with public-private venture Japan Display about selling a liquid-crystal display TV panel plant located in Chiba, not far from Tokyo, said two sources with knowledge of the matter.
Panasonic, which has been touting enviromental and energy technology as key growth areas, had planned to convert its Amagasaki No. 1 TV panel plant in Hyogo prefecture to solar panel use and export the plasma TV panel equipment for use at a plant in Shanghai.
But it will now drop the plan and stop producing TV panels there, the source said.
The Nikkei newspaper, which reported the news earlier, said demand for solar panels was expected to slump in Europe, while Panasonic was facing harsher competition from Asian rivals in the domestic market.
Shares in Panasonic ended Friday morning trade up 1.6 percent at 765 yen, compared with a 0.1 percent fall in the Nikkei average .
Panasonic, which is losing ground in consumer electronics to Asian rivals like Samsung Electronics , said in April it would lay off about 17,000 people in the next two years in a bid to cut costs and get rid of overlapping businesses after buying out rival Sanyo.
It is set to report July-September earnings and give a briefing on strategy on Oct. 31.
A source told Reuters on Thursday that Panasonic would slash TV panel production by halting its state-of-the-art Amagasaki No. 3 plant, which was completed less than two years ago, and lay off about 1,000 people.
Like rival Sony , Panasonic is struggling with losses in its TV division.
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