Matsushita Electric Industrial (MEI) and Toshiba plan to merge their cathode ray tube (CRT) operations, the companies said Thursday. Matsushita separately announced further details of its reorganization.
Matsushita, best known for its Panasonic brand name, and Toshiba plan to establish a CRT joint venture by the end of March, the end of the financial year in Japan. The new, yet to be named joint venture, will be held 60 percent by Matsushita and 40 percent by Toshiba. It will be headquartered in Osaka, where Matsushita is based, the companies said.
The merged operations of the two companies will represent the third-largest CRT company in the world and will focus on display tubes for TVs, they said.
CRTs are facing intense competition from LCDs (liquid crystal displays) and PDPs (plasma display panels.) More competition from new display technologies such as OELD (organic electroluminescence display) is on the horizon. Despite this, Matsushita and Toshiba estimate the global CRT market will see annual growth of 2 percent to 3 percent.
"Considering advantages such as its cost and brightness, CRT is still one of the most important display devices," said Kunio Nakamura, president and chief executive officer (CEO) of Matsushita, at a news conference in Osaka on Thursday.
The joint venture will operate globally, but will focus on the Chinese and South-East Asian markets, Nakamura said. "We expect the Chinese market will rapidly grow by the time Beijing hosts the Olympics in 2008," he said, adding that in China and South-East Asia growth may also be helped by a possible start of high-definition broadcasting.
"We decided to merge this business in order to survive in highly competitive market," said Tadashi Okamura, president and CEO of Toshiba.
This merger will result in Matsushita's and Toshiba's second display joint venture. The Japanese companies merged their LCD (liquid crystal display) divisions into Toshiba Matsushita Display Technology Co. Ltd., in April this year. At this point, the two companies have no plan to merge other display units, such as PDP, Nakamura and Okamura said.
Matsushita separately announced Thursday the latest step in a reorganization plan that was announced earlier this year.
Matsushita Communication Industrial Co. Ltd. (MCI) and office equipment maker Kyushu Matsushita Electric Co. Ltd. are to become wholly owned group companies through share exchanges on Oct. 1. The organizations are two of the biggest companies in the Matsushita group and bringing them back under the full ownership of Matsushita is crucial to future stages of the plan, Matsushita said.
At present, the three companies compete with one another in some fields and overlap in research, development and product planning functions, Matsushita said.
As a result of the move, the operations of MCI will be combined with the communication equipment sales unit of MEI under the name "Panasonic Mobile Communications Co. Ltd." on Jan. 1, 2003, Matsushita said.