Pioneer and NEC recently announced an agreement in which NEC will transfer all shares and intellectual capital of its subsidiary NEC Plasma Display to Pioneer.
According to officials at both companies, the deal reflects the stark contrast in where the plasma display business fits into their respective overall product strategies. In recent years, both companies have narrowed their focus on growing profits around select product lines. Lately, NEC had increased its attention on IT/network solutions and semiconductor solutions, two areas that require very distinct and targeted expertise and resources. NEC found itself with less bandwidth to dedicate the necessary resources to growing its plasma display business. Conversely, Pioneer has grown more committed to the plasma business since it has become one of the company’s core product areas as part of its "select and focus" management policy.
Realizing that would require a substantial cash infusion to sustain growth in its plasma display business, NEC turned to external sources for the necessary revenue. The company found a taker in Pioneer, which determined that the two companies’ respective plasma display technologies were similar in their design and high quality. Pioneer felt integrating the technologies and doubling its expertise and production capabilities would enable the company to create and meet a great increase in demand for the product.
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