Pioneer Puts Expansion On Hold After Plasma Sales Drop

Pioneer Electronics said in its earnings report yesterday that plasma sales were off 10 percent in the quarter thanks mostly to a "substantial drop" in OEM sales, and as a result, the company is putting on hold plans to open a new plasma production plant west of Tokyo. Plasma displays represent nearly half of the company's home electronics sales, so while Pioneer would like to increase capacity, particularly on newly announced 1080p models, instead it will spend less money manufacturing PDPs and more on marketing them. Tighter supplies are expected due to the capacity restraints imposed by their current plant operations, which in a time of declining flat-panel prices industry-wide, will make it tough for the company to grow its position in the market.

The interesting part of this is that market research firm DisplaySearch released data earlier in the week that suggested Pioneer was actually doing pretty well based on the number of plasma panels shipped and the rate of growth. Apparently the holiday season was not particularly good for the company.