When Pioneer first announced it was getting out of the plasma display panel (PDP) business in early March, part of the story was that Matsushita would make panels for Pioneer using Pioneer’s technology and specs. Then, the story got squishy, with Pioneer saying panels would be made by somebody, but not necessarily Matsushita. People at Matsushita became equally vague.

Ken Werner
Senior Analyst and Editor

Following the company’s last annual general meeting, Pioneer President Tamihiko Sudo’s lack of apparent urgency was enough to puncture the run-up in stock price inspired by the announcement that Pioneer was leaving the PDP business. Analysts who attended the Pioneer briefing complained that the company had enough time to prepare a quantitative plan but still spoke only in generalities, reported Yusuke Matsuzaki in The Nikkei. Kazuharu Miura of Daiwa Institute of Research went so far as to say, "Pioneer should now be seen as a major car-electronics maker."

But last week the other shoe dropped, with Matsushita and Pioneer announcing a complete merger of their PDP operations, with Pioneer’s PDP R&D organization being absorbed into Matsushita’s, and a common panel design to be developed for both companies’ TV sets. Of course, this makes much more sense than Matsushita devoting part of its production capability to make a PDP with a separate design for Pioneer. The new PDP modules are to be ready for Pioneer’s new PDP-TVs to be introduced in the fall of 2009.

Both companies will continue to supply their own PDP-TVs, with each company using its own proprietary image processing technologies. What goes away is any independent Pioneer panel-development and manufacturing effort.

The question is whether Pioneer can run a profitable TV operation even when it’s acquiring competitively priced panels from Matsushita for plasma (and Sharp for LCD). That remains to be seen.

Meanwhile, the PDP market shows no sign of vanishing any time soon. Displaybank announced on Tuesday that PDP module shipments reached 3.65M units in Q1′08, up 56% from Q1′07. ASP for PDP modules dropped by 13% to $433 because of a more-than-20% increase in shipments of lower-priced 32-inch units.

In the PDP business - and the LCD business, too, but we’re not talking about that - the big get bigger. LGE, on the strength of creating what amounts to a new PDP business in the 32-inch segment, accounted for 35% of total quarterly shipments in Q1 and took first place back from Matsushita, which was second. Samsung SDI was third. Hitachi and Pioneer saw their shares drop dramatically to 4% and 1%. With Pioneer getting out of the module business and the Top 3 accounting for 95% of the market, where does Hitachi go from here? Where Pioneer leads…