Pioneer Corp., the Japanese electronics maker, announced on Friday that it will halt the production of display panels due to a much too intense competition from other Asian rivals, such as LG or Samsung, which already made Pioneer enter a fourth consecutive year of downfall.

“We have judged that maintaining the cost competitiveness of plasma display panels, or PDPs, at projected sales volumes will be difficult going forward,” Pioneer said in a press release. “Accordingly, we have decided to terminate in-house plasma display panel production and to procure these panels externally, after panel production for our next series of models is complete.”

The solution to the financial loses: purchasing plasma display panels from one of their rivals, the Japanese company Matsushita Electric Industrial Co. The two companies haven’t made an official announcement, but they are apparently in talks, and details will be announced as soon as they are finalized.

“This move will allow us to transform our business model for displays from vertically integrated, capital-intensive operations to a leaner business model geared to making value-added product proposals,” the press release further said.

The company said that they were planning on compensating the cutbacks in the plasma business but sending part of the personnel to the Car Electronics business, the Professional Sound and Visual business or the Audio/Video business. At the same time, Pioneer expects to restore profitability to the Home Electronics business not sooner than 2010.

Pioneer promised to make an effort to “steadily implement structural reforms of its display business”, and at the same time, continue to expand the Car Electronics business and get Home Electronics business back on its feet.

Last year Pioneer closed a deal with Sharp Corp. for liquid crystal display panels (LCD), which the company also mentioned in its statement: “Through the business alliance with Sharp, we will utilize each other’s resources … in order to develop new products and businesses and improve the efficiency of development activities.”