Shanghai Panasonic
Falling demand for plasma blamed for closure, but some TVs will continue to be made in a second Chinese factory

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Panasonic announced today that it's closing down its plasma TV assembly plant in Shanghai, China – the latest stage in the reduction of its plasma display capacity in the face of a market increasingly dominated by LCD TVs.

The company has already pared back its plasma display panel production in Japan, as part of cost-cutting measures brought about by what's expected to be a net loss of some Y765bn (around £5.3bn) for the current financial year.

The Shanghai plant hasn't been operating since last September, and its closure reflects a market oversupplied with plasma TV manufacturing, and the failure of the technology to sell in large quantities in China, which Panasonic saw as a major growth market.

And the TV product mix is changing: two years ago Panasonic sold 7.5m plasma TVs in a year, representing almost 40% of its TV sales, but this year it expects to sell just a third as many, and for LCD-based TVs to account for 84% of all sales.

The company says it isn't abandoning plasma: it still makes display panels in Japan, and sets are assembled at several plants worldwide. And that includes China: some of the capacity of the Shanghai plant will transferred to an existing LCD TV factory in Jinan, Shandong Province.

Panasonic shares rose just over 4% in Tokyo on news of the factory closure and the ongoing decline of the Japanese Yen on currency markets.

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