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Hitachi to ramp up plasma production

Tokyo company hopes $787 million investment will pay off big, allowing it to produce 100,000 more plasma displays a month.

Electronics manufacturer Hitachi said it should be able to produce 100,000 more plasma displays every month thanks to a planned additional plant.

The Tokyo-based company said it will be investing $787 million (85 billion yen) in the Miyazaki Works facility of its Fujitsu Hitachi Plasma Display (FHP) project, which should be completed by late 2006. The plant is the result of Hitachi's partial purchase of Fujitsu's equity stake in the factory earlier this year. Hitachi said it will now make FHP a consolidated subsidiary.

FHP is one of the leading manufacturers of plasma panels in the world, but falling margins are conjuring a dark future for the plasma display market, according to analysts.

Hitachi executives said they want to grow their plasma business in Japan by pushing the Wooo brand to the forefront. The overseas products are sold under the Hitachi brand name.

The company said it hopes to also differentiate itself from the competition by using a new method of making plasma displays known as ALIS (Alternate Lighting of Surfaces).

Unlike current technology, ALIS alternately displays odd and even lines at high speeds. The effect makes it possible to create high-resolution images using about the same number of electrodes as those used in VGA (Video Graphics Array) products.

Hitachi originally planned construction of a new, third FHP plant at its Miyazaki Works in March 2004. At the time, the plan included a $694 million (75 billion yen) price tag and an aggressive rollout with construction early in 2005 and running at full production in 2006.

The company said it suffered setbacks, however, because of a sharp drop in plasma screen prices and the choice to redesign its plasma screens using the ALIS technology.

Hitachi now expects the combination of its two Miyazaki Works plants will allow it to make 200,000 plasma screens every month and about 300,000 units by the end of March 2009.