LG shuts plasma TV plant

LG is cutting the number of 42-inch plasma TVs it makes

LG is to close one of its three plasmas TV factories in South Korea. The company made the announcement on Friday following disappointing plasmas sales that actually plunged the company into the red last month. LG is the world's second biggest plasma TV maker.

The factory closure is symptomatic of a move away from plasma and towards LCD TVs. LCD panel size has increased massively in the last few years and is easily able to compete with plasma in panels up to 42-inches in size. Increasing factory capacity is also making LCD panels cheaper to make compared with its plasma rival.

LCD looks set to "become the dominant flat panel TV technology," according to Philips which denied it was going to withdraw from plasma TV making in March. Sony stopped making plasma displays in 2004.

The factory closure will cut LG's plasma-making capacity by 16 per cent, LG said. It would also save the company 20-30 billion Won (£11 million to £16.5 milion). The factory is the smallest of three run by the LG and makes 42-inch plasma displays.

Plasma TV - boom or bust?

However LG's plasma problem is far from universal. Plasma sales are booming at arch-rival Samsung, according to Reuters . Sales of Pioneer plasmas also remain strong [PDF link] in Europe and the USA.