Panasonic to sell chip business to Taiwanese company: source
OSAKA, Kyodo - Panasonic Corp. will sell its chip business to Taiwan's Nuvoton Technology Corp. as part of a restructuring effort in which it aims to cast off loss-making operations and instead focus on growth areas, a source familiar with the matter said Thursday.
The Osaka Prefecture-based company will sell its shares in Panasonic Semiconductor Solutions Co., based in Kyoto Prefecture, and TowerJazz Panasonic Semiconductor Co., a Toyama Prefecture-based joint venture it set up with Israeli firm Tower Semiconductor Ltd., the source said.
Japanese chip manufacturers, which were once global leaders, have struggled in recent years in the face of fierce competition with South Korean and Taiwanese rivals.
The sale comes as Panasonic has taken cost-cutting measures to make up for sluggish sales in China amid the country's prolonged trade war with the United States.
The Japanese company expects to report a decline in sales and group net profit for the first time in three years in the current fiscal year through next March.
Panasonic CEO Kazuhiro Tsuga said earlier this month the company will “eradicate” all continuously loss-making businesses by the fiscal year ending March 2022.
In July, Panasonic said it will close a television production site in Mexico amid low profitability. The manufacturer also said last week it will withdraw from all production of liquid crystal display panels by 2021 due to intense competition with foreign rivals.
Panasonic projects its group net profit will fall 29.6 percent from a year earlier to 200 billion yen ($1.8 billion) for the current business year ending March and has forecast sales to slip 3.8 percent to 7.7 trillion yen.