Panasonic Corp will start manufacturing small and midsize LCD panels for tablet devices at its television panel production base next spring as business for larger displays worsens, the Nikkei business daily said.

Domestic demand for TVs plunged after the termination of government subsidies for energy-efficient home appliances, pushing down the price of large LCD panels, Nikkei said.

Panasonic plans to gradually increase production of tablet-size LCD panels to half the output at its plant in Hyogo Prefecture. The company will shift its focus from TV LCD panel operations to 50-inch and larger panels, which have healthier margins, the daily said.

Panasonic merged its small and midsize LCD panel operations with Toshiba Corp's in 2002. But it exited the business in 2009 by selling its entire stake in the joint venture to Toshiba, the Nikkei said.

(Reporting by Durba Ghosh in Bangalore)

Manufacturing TV