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Predicting a sharp increase in demand for plasma display panels (PDPs), Matsushita Electrical Industrial Co. Ltd. has entered a partnership with Tokay Industries, Inc. to build another PDP plant in Osaka, Japan, according to a May 21 announcement.

Matsushita, parent company of Panasonic, hopes the new plant will boost total annual production of PDPs to 1.5 million units, including large numbers of 60" panels. Construction on the company's second PDP fabrication plant will begin in January 2003, with production expected to begin in April 2004. Capital investment in the venture will exceed 60 billion yen.

Matsushita also hopes to increase output at its first PDP facility by as much as 50%—elevted it current 20,000 units per month output to 30,000 later this year. The goal is to own "more than a 30% share in the world PDP market," according to division president Ken Morita.

The company's analysts predict worldwide demand of four million plasma display panels in the near future, with demand expected to roughly double every year for the next few years. The global market for the devices was approximately 300,000 units for fiscal 2001, and is estimated at 700,000 units this year. Competitor Fujitsu Hitachi Plasma Display, Ltd. puts the numbers even higher, projecting PDP sales of one million units this year. Fujitsu currently produces about 30,000 plasma displays per month and plans to double that figure this year.

Matsushita will also leverage low Chinese labor costs by building some of its plasma units at its Chinese subsidiary, Shanghai Matsushita Plasma Display Co., Ltd. That facility will go into production in 2003 with a projected output of 20,000 units per month.

Currently, Japanese manufacturers Fujitsu, Matsushita, NEC, and Pioneer Electronics essentially own the world market for plasma screens and have yet to feel the heat from Chinese or Korean competitors. As has happened with DVD players and other electronics, retail prices can be expected to plummet once mainland Chinese manufacturers enter the PDP arena.