The two possible deals would allow Matsushita, the world's biggest maker of plasma TVs, to do an about-face and move aggressively into liquid crystal displays (LCDs) while enabling Hitachi to scale down a loss-making business.
Global LCD TV sales will likely grow 85 percent to $91 billion by 2010, while rival plasma TV demand is expected to shrink 15 percent to $15.8 billion over the same period, according to research firm DisplaySearch.
But some analysts questioned the logic behind Matsushita making such a big bet on LCD production at this stage.
The Nikkei said Matsushita's new LCD factory would likely make LCD panels from so-called "eighth-generation" motherglass, which is bigger and more efficient than the "sixth-generation" glass currently used at their IPS Alpha Technology joint venture.
"This is a move that Matsushita had to make," said Tetsuro Miyachi, fund manager at Franklin Templeton Investments Japan.
"It needed to decide whether it would become a niche player in 50-inch-plus TVs or pursue the mass market, and if it was going to do that it had to get bigger in LCDs," he said.
