Demand for flat-panel televisions larger than 37 inches is set to swing overwhelmingly in favour of liquid crystal display televisions rather than plasma TVs, the rival technology, according to a senior executive at Sharp.

Hirotsugu Terada, the head of Sharp's audio/video group, forecast that sales of large LCD TVs in Japan would reach 1.1m units in the half year from October to March 2008, compared with 478,000 units for plasma televisions.

In the past, observers assumed that plasma televisions would trump LCD TVs over 37 inches, as they are cheaper to manufacture and the picture quality was thought to be superior. But significant advances in LCD panel manufacturing efficiency, coupled with dramatic improvements in picture quality, are leading more consumers to choose LCD panels over plasma.

Although Matsushita Electric (NYSE: MC - News) , better known as Panasonic, has announced plans to double production of its plasma display panel output capacity within two years, smaller players in the market have been suffering due to severe price competition. LG Electronics, the world's second-largest PDP maker after Matsushita, is struggling to reduce heavy losses at its PDP business. Recently, LG quietly halted production at one of its three domestic PDP lines as part of a restructuring.

Sharp, a leading maker of LCD TVs, expects global sales of its televisions to grow by 50 per cent to 9m units this year, up from 6m units last year. The company has already doubled production at its second factory in Kameyama, Japan, to 60,000 panels a month from 30,000 panels in January. Next year, ahead of the Beijing Olympics – a key event that will boost TV sales – Sharp plans to ramp up production to full capacity of 90,000 panels a month.

Sharp on Monday launched what it called the "thinnest" LCD TV ever, measuring just 8.1cm in screen sizes ranging from 26-52 inches. The Aquos-brand TVs will debut in Japan next month and in overseas markets by the end of the year, in time for the crucial holiday shopping season.