Tokyo  - Matsushita Electric Industrial Co and Pioneer Corp reached a basic agreement on Thursday for Matsushita to develop and supply plasma display panels for Pioneer.

The two Japanese electronics makers were expected to seal a comprehensive partnership agreement in May and start product shipment in June 2009, the companies said.

The decision came after Pioneer Corp announced its withdrawal from plasma display panel production in March due to lack of profitability amid escalating competition.

Matsushita maintains the largest global market share for plasma displays with 31 per cent, with Hitachi Ltd holding 10 per cent.

Matsushita hopes to lead in the flat-screen TV business by adopting Pioneer's technology of creating high-quality images. (dpa)