Canon and Toshiba said on Tuesday they would start mass production of ultra-thin flat-panel TVs in early 2008, entering a market dominated by makers such as Matsushita Electric Industrial and Samsung Eletronics.

Canon Inc. and Toshiba Corp. are developing a new type of flat panels, which they say are thinner and consume less energy than the existing liquid crystal display (LCD) and plasma televisions.

The production of the new surface-conduction electron-emitter display (SED) TVs would start at the end of 2007, and expand into full-scale in 2008, Kazunori Fukuma, head of the venture set up by Canon and Toshiba, said at Japan's biggest electronics trade show, where he presented a 55-inch full high-definition TV for the first time.

Canon aims to roll out SED TVs to match surging demand from consumers who want to watch the 2008 Beijing Olympics with bigger, clearer and thinner screens. The spread of digital broadcasts will also spur demand.

But analysts have been concerned that incessant price erosion in existing flat TVs and ballooning output capacity for LCD and plasma panels, which helps TV makers cut per-unit costs, might dim the chances of SED TVs' commercial success.

Amid the industry's steep price declines and rising demand for larger TVs, Canon and Toshiba in March delayed the launch of their product by more than a year to the fourth quarter of 2007 to improve cost competitiveness.

The companies have said they invested 200 billion yen ($1.7 billion) to develop and make the new flat panels in Hyogo prefecture, west of Japan.

Canon, the world's biggest maker of copiers and digital cameras, has set its SED displays as a main pillar of growth in its mid-term business plan.

Shares in Canon were up 0.16 percent at 6,270 yen at 338 GMT, while Toshiba was down 1.28 percent at 773 yen. The benchmark Nikkei average was down 0.36 percent.

Japan Electronics TV