Tokyo - Fujitsu LTD said it plans to sell a majority of its stake in a 50-50 plasma display joint venture with Hitachi.
By the end of March, the company intends to sell 30.1 percent of its investment in Fujitsu Hitachi Plasma (FHP) Display LTD and its plasma patents to Hitachi.
Financial terms were not disclosed.
Under the plan, FHP would become a subsidiary of Hitachi, which plans to expand the technology to other electronics areas, including home networking.
In a statement on the move, Fujitsu said that “although the market for PDPs is expected to greatly expand, competition in the flat-screen television market has become severe, and it will be necessary to develop and manufacture panels offering even greater cost performance and higher added value.”
The companies said they believe that “transferring management control of FHP to longtime partner and plasma television leader Hitachi will enable the necessary restructuring and strengthening of FHP's operations under a new business model that will allow FHP to utilize Hitachi's know-how to an even greater extent than before.”
Although Fujitsu LTD was one of the first companies to produce and market plasma display panels in volume, aggressive competition from third-tier Asian companies has quickly ratcheted down pricing, and profitability in the technology.
Fujitsu’s course follows that of NEC, another early plasma developer, which sold its plasma manufacturing operations to Pioneer Electronics last year, citing profitability concerns.
As for Fujitsu General America’s North American sales operation, company president Tedd Rozylowicz said the decision by parent Fujitsu LTD in Japan will have little or no impact on his company’s plans to market and sell high-end home theater display products.
“FHP is a combination of two companies – Fujitsu and Hitachi – who provided glass to us in the same way the Panasonic and Samsung have provided glass to us,” Rozylowicz said. “Fujitsu General LTD is an affiliate of Fujitsu LTD, and we are customers of FHP, but the bottom line is that it is not going effect us, even for a moment.
“We will continue to buy glass from who ever has the best product available, including FHP.”