We've known Pioneer's been having a hard time of things lately, especially when they confirmed they were leaving the plasma manufacturing business. They hitched their wagon to Panasonic, the leading plasma manufacturer, but apparently Panny just delayed the opening of a new factory, citing economic strains. So you can see how the #2 would get shoved aside, if all of Panasonic's capacity is tied up with its own product.
As for its DVD and Blu-ray group, the Nikkei says it plans to merge that with a division from Sharp as some sort of new business venture.
UPDATE: Here's Pioneer's official non-response to the news:
As a matter of policy, we cannot comment on rumors or speculation. As you know, we have publicly announced that we are actively evaluating our business. We started announcing changes in March, 2008 to increase efficiencies of our business operations. We are still in that process but do not have any further announcements at this time.