Matsushita and Panasonic parent Matsushita are to extend their flat-panel display development deal.

The two Japanese giants said today they will work together on "superthin" plasma panels for TVs and combine their efforts to make such screens more energy efficient.

Hitachi will also buy Matsushita-made glass panels and use them in the production of its plasma TVs from April 2009 onwards. That will costs its own production operation ¥40bn ($382.6m) in lost sales, but the company claimed that won't impact its current earnings forecast.

The two said they would also work more closely on LCD TV development and production - something they already do through their jointly owned IPS Alpha Technology venture. But they did not go into details.

Both plasma and LCD plans are about increasing the ability of both firms to stay competitive in a world where plasma and LCD TV screens are falling in price and so many suppliers are punting products to consumers. Plasma makers are finding it particularly hard to keep up with the runaway success of LCD.

That's why Fujitsu, the first company to introduce plasma screens, ditched the TV technology back in December 2007.

In March 2008, Pioneer said it was getting out of plasma production and would instead buy in panels from another supplier. The following month, it named Matsushita as that partner.