Panasonic's plans to shut down a plant that assembles plasma display panels in Shanghai by the end of this year are due to an incorrect judgment of market trends, industry experts said.

Panasonic Corp of China said it has started preparation work in November 2012 to shut down its Panasonic Plasma Display Shanghai Co Ltd plant. The distribution and manufacturing work of the plant will be transferred to a factory that assembles LCDs in Shandong province.

The market for plasma display panels, or PDP, started to decline in 2006. Until the end of 2011, the ratio of LCD televisions to PDP sets was 15:1 globally, while the ratio in China was 20:1.

Industry experts said that PDPs are retreating from the market and that LCDs are the future trend, as the latter are thinner, more energy efficient and have higher resolutions.

Workers at the Shanghai plant will be transferred to other subsidiaries of Panasonic Corp of China or the Chinese partner of the Panasonic Shanghai PDP-assembling plant. If workers are not satisfied with those two solutions and insist on leaving, the company will pay compensations according to the law, Panasonic said.

Panasonic Corp of China added that the business transfer of Panasonic Plasma Display Shanghai Co Ltd is a regular business integration, which does not indicate that the company will no longer produce PDPs. The company plans to extend the use of PDP technology to other commercial areas beside televisions, it said.

shijing@chinadaily.com.cn