Panasonic to Withdraw from Chip Biz

Osaka, Nov. 28 (Jiji Press)--Japan's Panasonic Corp. <6752> said Thursday that it will pull out of the semiconductor business as part of its efforts to shed unprofitable operations. Panasonic will sell all outstanding shares in fully owned subsidiary Panasonic Semiconductor Solutions Co. to Taiwan's Nuvoton Technology Corp. for 250 million dollars. The deal will be implemented June 1, 2020. A total of 2,400 workers in the group's semiconductor business in Japan and overseas are expected to be maintained. Panasonic's pullout from the chip business marks the decline of the Japanese semiconductor industry, which dominated the global market in the 1980s and 90s. Only last week, Panasonic announced plans to stop its production of liquid crystal display panels. Chief Executive Officer Kazuhiro Tsuga has set a goal of eradicating unprofitable operations by fiscal 2021. Panasonic will transfer shares in two other chip-related units to Panasonic Semiconductor before the sale to Nuvoton Technology. Panasonic Semiconductor will keep holding a stake in TowerJazz Panasonic Semiconductor Co., a joint company set up with an Israeli company. The chip divisions of Chinese and Singapore units of Panasonic will also come under the wing of the Taiwanese company. Panasonic's semiconductor business has remained in the red in recent years partly because of a sales fall reflecting the U.S.-China trade war. In the year through March 2019, Panasonic Semiconductor posted an operating loss of 23.5 billion yen on sales of 92.2 billion yen. Panasonic's semiconductor business started in 1957 and became one of the group's core operations in the 1990s. But the division has been in a slump in recent years due mainly to competition from overseas rivals such as South Korean and Taiwanese makers. END