In February 2025, Panasonic, a major player in Japan's electronics industry, is reportedly considering the sale or downsizing of its struggling TV business in order to focus on high-profit areas such as artificial intelligence data centers. This news has sparked widespread attention and discussion in the industry, with many speculating whether this means that Panasonic TVs, which have been a familiar presence for consumers for many years, may soon become a thing of the past.

Current Status and Restructuring Plan of Panasonic's TV Business

The global TV market is highly competitive, with Chinese and South Korean brands gaining increasing market share thanks to their advantages in the industrial chain and cost control. Japanese brands such as Sony, Sharp, and Panasonic have seen their market share decline continuously since 2017, with their combined global shipment share falling to just 5.1% in 2024. Among them, Panasonic's TV business has performed poorly in recent years, with global shipments dropping from 6.31 million units in 2016 to 2.02 million units in 2024, resulting in a market share of only 1.0%. The return on invested capital (ROIC) for Panasonic's TV business is below the weighted average cost of capital (WACC) across all its businesses, and its growth prospects are lackluster. Panasonic bet on plasma display technology in the flat-screen TV era, missing out on the golden age of liquid crystal display (LCD) TVs, which led to its TV business being marginalized in the market.

Faced with this predicament, Panasonic has no choice but to consider a restructuring plan to speed up decision-making and focus on areas with greater growth potential. It was announced at Panasonic Holdings' financial results briefing on February 4, 2025, that Panasonic Corporation will be dissolved and its subsidiaries will be transformed into business companies. The restructuring plan includes integrating home appliance operations into a "Smart Life Company," combining air conditioning and other related businesses into an "Air Quality, Air Conditioning, and Food Distribution Company," and assigning lighting operations to an "Electrical Engineering Company." Panasonic Holdings has stated that this separation model aims to make each business segment more agile in responding to market changes and to prevent the difficulties of a single segment from dragging down the entire group.

Future Direction of the TV Business and Market Reaction

Yusuke Kusumi, Representative Director, President, and Group CEO of Panasonic Holdings, has said that Panasonic will abandon its traditional TV business and is considering selling or downsizing it, although other options are also on the table. Panasonic's TV business has been incurring losses in recent years and its position in the global market has been continuously eroding. Panasonic hopes to improve its overall profitability through restructuring and business adjustments, with a target of achieving over 300 billion yen in profit improvement by the fiscal year 2026, and further improving profits by over 750 billion yen by the fiscal year 2028.

Following the announcement of the restructuring plan by Panasonic Holdings, the company's share price soared nearly 15% on February 5, marking its largest intraday gain since February 2014. The market generally believes that Panasonic's decision to divest low-profit businesses and focus on high-profit areas will help enhance its overall profitability, and thus has an optimistic outlook on Panasonic's future performance.

In summary, the restructuring plan for Panasonic's TV business is a significant step in its strategic adjustment. By divesting low-profit operations and focusing on high-profit areas, Panasonic is expected to improve its overall profitability and achieve sustainable development. The positive market reaction, marked by a sharp rise in its share price, reflects investors' confidence in Panasonic's future prospects.

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