Industrial Dynamics and Locational Adjustment : Implications for Agglomeration Economies from the Case of Flat Panel Displays in Japan

Viewed globally, the production sites for the flat panel display (FPD) industry are concentrated in Eastern Asia. In particular, more than 90% of panels were produced in Japan, Korea and Taiwan. Also, in Japan, the geographical concentration was remarkable as was shown by Sharp, which produced liquid crystal panels in Kameyama, and Panasonic’s manufacture of plasma display panels (PDP) in Ibaraki and Amagasaki in the 2000s. Taking these facts and the significant changes in the modern economic environment as starting points in this paper, I study the conditions surrounding the location of FPD factories and the factors that affect such conditions from the viewpoint of spatial and organizational decision-making that seeks global advantage by focusing on technological cycles and facilities investment. From the example of one of the largest FPD manufacturers, Panasonic, I observe the progress of large-scale production and the shortening of the technological cycle, which suggests that the “thickness” of an industrial agglomeration is very important if a company wishes to maintain competitiveness