TOKYO - Industry reports indicate that Pioneer Electronics is finalizing plans to stop its production of plasma display panels. Shares were up 11.2%, a four month high, as a result of the report.

Pioneer has been struggling to compete with larger rivals such as Matsushita Electric Industrial, maker of Panasonic electronics products.

According to reports, Pioneer will buy plasma panels for from Matsushita, and LCD panels from Sharp Corporation, to also offer LCD TV products based on Sharp's technology.

"Pioneer could have chosen to step up its plasma investment, despite the red ink, but it's a wise step to decide against that," said Mitsushige Akino, Ichiyoshi Investment chief fund manager.

Japanese TV manufacturers have moved to become more cost-effective, as manufacturers with efficient production methods and available capacity, such as Matsushita and Sharp, look for panel buyers, while smaller manufacturers look for ways to obtain display panels without making large investments.

A Pioneer spokesman said the company would unveil its complete strategy when it announces its business plans on Friday.

This move implies that the company will close its panel manufacturing facilities in Kagoshima in Japan, but Pioneer is considering ways to keep the factory open, sources said.