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Earlier today in Japan, Hitachi Ltd (HIT) announced it will boost production of plasma TV panels via its subsidiary, Fujitsu-Hitachi Plasma Display (FHP). Initially, production capacity was expected to be increased by sometime in 2008 but this has been moved up by about a year beginning from summer-2007. The Nikkei Shimbun reports production capacity is expected to be expanded to 2.4 million panels from this October and it’s believed that this amount will be further increased to 3.6 million from next summer.

Similar to its rivals, Hitachi is crediting its expansion to large unmet global demand for flat thin-screen televisions. This reminds me of the solar cell industry where demand consistently outpaces supply. One concern for thin-screen televisions however, is price erosion. This has already forced a venture between Canon (CAJ) and Toshiba to push back plans to release superior screen technology until next year. If prices continue to erode as fast as they have, it will be harder for manufacturers to recoup costs that went into design and production.


HIT 1-year chart:

Source: Citing High Demand, Hitachi Plans to Boost Plasma TV Panel Production (HIT)