LG's shutdown of PDP TV line shows technology on way out

By Kim Yoo-chul

There was a time when plasma seemed to have a real shot against liquid crystal display (LCD) in the battle to become the mainstream technology in flat-screen televisions.

That ship sailed a long time ago and the recent decision by LG Electronics to shut down a plasma display panel (PDP) line in Gumi, North Gyeongsang Province, is an indicator that manufacturers are finding it increasingly difficult to find a place for plasma screens in their product lineups.

Multiple sources at LG, the world’s second-largest television maker behind domestic rival Samsung Electronics, say that the company is even discussing whether to completely scrap its plasma television business, although a company spokesman declined to confirm this.

Samsung apparently faces a difficult decision over plasma as well. It continues to produce PDP televisions but there has been a sharp pullback in volume in recent years.

``There is high demand for plasma televisions in some emerging nations, but overall, these types of televisions are being phased out because manufacturers and distributors no longer see the business upside in pushing them. The focus has been shifted to light emitting diode (LED) backlit LCD televisions and organic LED (OLED) models, premium products that provide higher margins,’’ said a senior Samsung television executive.

LG’s decision to retire the A2 line at its Gumi factory by the end of the year was perhaps predictable. It stopped producing PDP televisions at its A1 line in 2007 in a cost-cutting move, and now A3 expects to be the company’s sole production line for PDP televisions.

``The reason is clear. LG wants to cut off a money-losing television line,’’ said an official from one of the firm’s parts suppliers.

LG was producing 50-inch PDP televisions from the A2 line, while it was rolling out 42-inch and 60-inch models at A3, according to an official from Gumi’s city government.

The latest decision will result in LG cutting annual output for plasma televisions to 2.5 million next year from this year’s estimated 3.5 million, he said.

``Korean TV titans such as Samsung and LG are struggling to meet their earlier TV sales goals. Their mainstream products are using LED or LCD technologies. That means plasma TVs are not attractive,’’ said Kim Ji-san, an analyst at Kium Securities.

Last year, Panasonic, the world’s biggest plasma television maker, announced it would restructure its less-profitable plasma television business.