The two companies said they had signed a Memorandum of Understanding under which NEC Corp. will sell its wholly owned plasma display making unit -- NEC Plasma Display -- to Pioneer Corp. at a price yet to be fixed.

Pioneer's new expanded operations will have a global market share of 22 percent, they said.

Plasma display technology is locked in a battle with liquid crystal display (LCD) technology for supremacy in the exploding global market for flat-panel displays, which are used in new thin-screen televisions and computer monitors.

"Through the integration of the two companies' top-level technology, I believe we will win the competition between PDP and LCD panels," Pioneer President Kaneo Ito told a press conference.

The Asahi Shimbun daily said Tuesday the takeover bid amounts to about 40 billion yen (379 million dollars).

NEC President Akinobu Kanasugi said the company was selling its PDP unit despite the bright outlook for the technology because it wanted to concentrate future investment in two other areas.

"In our mid-term management strategy, we decided to concentrate on two fields -- IT networks solutions and semiconductors," said Kanasugi, who has presided over other major asset sales recently as NEC strives to return to profitability after losing 336.6 billion yen in the past two years.

Nearly 80 percent of Japanese production of PDPs, a next-generation display device for television sets, is concentrated in four companies -- Pioneer, NEC, Hitachi Ltd. and Matsushita Electric Industrial Co. Ltd.

As the size of PDPs grew larger, the four companies began a research alliance last year aimed at lowering power consumption, which is a weak point in the PDP technology, the Asahi said.

A 30-inch (76-centimeter) television set with an LCD screen made by Sharp costs about 500,000 yen in Japan while a 32-inch model made by Sony sells for 550,000 yen.

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