Japan's Matsushita Electric Industrial Co. said Thursday it was in talks with TCL Corp. to boost its procurement of cathode ray tube (CRT) televisions from China's top TV maker.

As part of an alliance formed with TCL in 2002, Matsushita produces the tubes and outsources assembly of the sets to TCL under an original equipment manufacturer (OEM) agreement. Matsushita then sells the TVs in China under its Panasonic brand.

Matsushita said it was in negotiations to boost the number of sets assembled by TCL by about fivefold in the next business year starting April 1. That would raise the number of sets outsourced to TCL to roughly 300,000 units in 2005/06, compared with 60,000 in the current business year.

"We are in talks but nothing concrete such as prices has been decided," said Matsushita spokesman Katsumi Takahashi.

Matsushita plans to shift the focus of its own TV assembly facilities in China to plasma televisions and other high end models, leaving assembly of low-end models to TCL Corp., which lists A shares on the Shenzhen Stock Exchange.

Source: Shenzhen Daily-Agencies