Hitachi's currently ranks fifth in the PDP market and lagged behind in the LCD TV market during the first three quarters of 2005, according to market researchers DisplaySearch. Hitachi's TV business is one of its major loss-makers along with TVs, display panels and storage drives.

Hence, its flat TV strategy aims to revive its TV and display units over the next year. To boost its display business, Hitachi said it would work to reinforce it overseas operations. A new European plant is under consideration.

The company said it intends to nail down details of its plan by March, and intends launch the PDP effort in 2007.

A new European plant would be one of Hitachi's largest flat TV assembly base besides plants in Japan, the United States and China. The new plant will have a monthly capacity of about 120,000 units by 2007. All four plants would assemble both PDP and LCD TVs using panels supplied from Japan.

"We will put the priority on investment rather than profitability for the time being," said Makoto Ebata, vice president and executive officer of Hitachi.

Hitachi expects shipments to the North American market will grow to 840,000 units in 2008, accounting for 24 percent of the total HD PDP market.

Hitachi is forecasting that demand for HD-type PDP TVs will grow by 70 percent by 2008. Hence, the company is concentrating on HD panels.

It also wants to leverage the company's vertical integration that includes manufacturing, materials, semiconductors, PDP panels and finished TV sets. "With our technology, I am convinced that we will be quite advantageous in cost competition," said Ebata.

But Hitachi's strategy must wait for operations to start at Fujitsu Hitachi Plasma Display Ltd.'s (FHP) new PDP fab along with a new LCD joint venture, IPS Alpha Technology Ltd. Both are scheduled to begin operations in 2006.

The new PDP fab, FHP's third, will initially begin operations with a monthly capacity of 100,000 units. At that point, Hitachi's total PDP capacity will double to 200,000 units.

IPS Alpha, a joint manufacturing company founded with Matsushita and Toshiba, will begin production in the third quarter of 2006 with an annual capacity of 2.5 million units.