By Chris Nicholls

TOKYO: Pioneer has announced it will cease manufacturing its own plasma panels, ending a week of speculation about the business’s future.

In a release on its Japanese website on Friday at 6.00 pm (AEDT), Pioneer said increasing competition and the race to reduce costs meant it would not use its own panels in its next generation plasma televisions.

While it did not confirm where it would source its panels, saying only it would be from ‘an external source” and would be decided soon, most speculation has pointed to Panasonic being the likely supplier.

Such a decision would leave Panasonic as the only large-scale plasma panel manufacturer in Japan, and one of only three large-scale manufactures in the world (the others being LG and Samsung).

As a result of the decision, the company said it would re-structure the company to focus more on its other traditional strong suites – in-car entertainment, satellite navigation, sound systems, including DJ equipment, and Blu-ray and DVD players and recorders.

However, Pioneer said it would ensure as few jobs as possible were lost as a result of the decision, re-allocating staff from the plasma manufacturing divisions to its other businesses.

The exit from the plasma manufacturing business will not stop the company booking a loss on its plasma televisions for the Japanese fiscal year ending March 31, though, the company said.

“In fiscal 2009, we will streamline the plasma display business and shift resources to our growth businesses. However, these measures are not expected to produce significant benefits until fiscal 2010. Nevertheless, we believe that these measures will help to restore profitability in the Home Electronics business in fiscal 2010,” the company said.