TOKYO — Call it the end of an era. Panasonic will stop producing plasma TV panels by March 2014.
Ditching the unprofitable business had been high on Panasonic President Kazuhiro Tsuga's to-do list since he took office last year, but the exit will be made a year sooner than had been predicted.
In recent years, the weakening TV business has stalked Japan's many ailing consumer electronics companies, including Panasonic. Its TV division has contributed to the company's $15 billion of net losses over the past two fiscal years. Last year, that division posted an operating loss of 88.5 billion yen ($913 million).
Japanese manufacturers were ground breakers in the development of plasma TV. But with the handwriting on the wall, Hitachi left the plasma panel business in fiscal 2008. Pioneer called it quits a year later, leaving Panasonic as the last company to abandon plasma screens.
Especially damaging to Panasonic's business was its decision to invest more than 500 billion yen in its plasma-focused Amagasaki facility in the mid-2000s, when LCD panels were already dominating the flat-panel TV market worldwide.
Tsuga earned his reputation by becoming the first Panasonic executive to question openly if plasma screens were visibly better than LCD panels. In a 2012 essay that appeared in the reputable monthly publication Bungei Shunju, Tsuga described a personal experiment at home. Soon after taking over the money-losing TV unit in April 2011, he had a Panasonic plasma TV and a rival brand's LCD TV installed in his home to compare them from the consumer's viewpoint. "My wife and I watched them every day. My wife, who was probably rooting for Panasonic, said that plasma TV might be a little better. But I didn't see a discernible difference."
Panasonic has halted development of new plasma TVs. It will continue selling them -- reportedly until next fiscal year, when inventory is expected to run out.
Tsuga has been outspoken about shutting down any division that fails to meet a 5 percent operating margin within three years. He is also offloading so-called noncore assets. Panasonic agreed last month to sell its healthcare business, which makes blood sugar monitoring devices and electronic recordkeeping systems, to the US private equity firm KKR & Co. for $1.67 billion.