OSAKA -- Panasonic will withdraw from manufacturing LCD panels for televisions, succumbing to stiff price competition.
The company plans to end production of the parts at its Himeji plant in Hyogo Prefecture by the end of September. Corporate clients have been informed of the decision.
The Himeji plant -- Panasonic's sole manufacturing site for the panels -- began operations in 2010 and employs roughly 1,000, including contract workers. Hundreds will be reassigned to car battery production facilities and elsewhere, a plan Panasonic will soon start discussing with labor.
The plant has a monthly output capacity equivalent to 810,000 32-inch panels, the main product, with sales estimated at 80 billion yen ($720 million). It supplies such manufacturers as Funai Electric, but its utilization rate has been declining.
The facility will remain open, producing parts for medical devices, car monitors and other non-TV components. Panasonic is looking to shrink total output volume by roughly 75%.
The Japanese company will still make and sell LCD TVs and is already procuring panels from South Korean manufacturers.
Panasonic started producing LCD panels back in 2006 at its Mobara plant in Chiba Prefecture. But earnings took a hit as South Korean rivals Samsung Electronics and LG Display, as well as Taiwanese and Chinese competitors, increased output. The company ended production at Mobara in 2012 and sold the plant that year, consolidating operations into Himeji. But it has continued to struggle amid intensifying price competition.
Panasonic had already withdrawn from plasma TV panels, an operation in which it had invested heavily, at the end of fiscal 2013.