A joint venture between Fujitsu Ltd and Hitachi Ltd said on Monday it would build a third plasma display panel (PDP) factory in 2005, becoming the latest PDP maker to boost output capacity to meet rising demand for flat-panel televisions.
Fujitsu Hitachi Plasma Display (FHPD) Ltd, a 50-50 venture between the two firms, said it planned to invest 75 billion yen ($669 million) to build the plant in Miyazaki, southern Japan.
"The move anticipates major growth in demand around 2006 and 2007 for large-screen PDPs used in flat-screen TVs and commercial displays," the venture said in a news release.
The popularity of plasma display televisions and liquid crystal display (LCD) TVs is prompting consumers to trade in bulkier cathode-ray tube (CRT) sets for sleek, new models.
FHPD predicts consumers, eager to watch the summer Olympics this year and the soccer World Cup in 2006, will boost demand for PDP televisions to 10 million units in 2007 from 1.4 million in 2003.
Other manufacturers are also gearing up for a pick-up in demand. Matsushita Electric Industrial Co Ltd, the maker of Panasonic electronics, has said it was considering building a fourth PDP plant, due to come online in 2006.
In February, Pioneer Corp announced it would pay around 40 billion yen to acquire NEC Corp's PDP operations, which will almost double its output capacity.
FHPD said it would also double output capacity at an existing facility in Miyazaki to 100,000 panels a month by January 2005, four months ahead of schedule.
Initially, the new facility will have output capacity of 50,000 units a month at the end of 2005 when mass production is slated to begin, but the company expects monthly production capacity to triple to 150,000 panels by 2007.
The total investment also covers the funds needed to boost production capacity at the new factory. FHPD has three factories at the Miyazaki complex.
More details are expected when the venture's president, Yoichi Morimoto, Hitachi President Etsuhiko Shoyama and Fujitsu Chairman Naoyuki Akikusa hold a news conference at 5:15 pm (0815 GMT).
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