Panasonic Left Silicon Manufacturing Business

Vitaliy_Kiselev

Panasonic, an electronics manufacturing giant, has today sold its silicon manufacturing business, marking the end of an era of Japanese semiconductor manufacturing. Once a big player in silicon manufacturing scene, particularly in the '80s and '90s era when Japan's silicon output was huge, Panasonic was considered one of the main players in the silicon manufacturing business. Due to some difficulties like operating a business with a loss of over $215 million yearly, and having to compete with Chinese and Taiwanese silicon manufacturing firms, Panasonic is selling its silicon production lines.

The subsidiary of Panasonic called "Semiconductors Solutions" is being sold to Nuvoton Technology Corporation, a semiconductor company that spun-off from Winbond Electronics Corporation in 2008, where Winbond still owns 61% stake in Nuvoton despite the spinoff. Additionally, Panasonic forecasts a 27% drop in operating profit for this physical year, with the declining semiconductor manufacturing business counted. The reasoning behind this sale is that the company plans to exit all declining businesses that also include LCD manufacturing, as Chinese alternative manufacturers are stiff competition for Panasonic when it comes to pricing and panel output.

https://techxplore.com/news/2019-11-era-japan-panasonic-exits-chip.html

Panasonic now can only assembly their cameras from Sony chipsets and Sony made sensors, let's see how long it'll last.

Vitaliy_Kiselev

Acquiring Panasonic's loss-making semiconductor business will have a negative impact on Nuvoton Technology's profitability in the short term, and it may take time for the business to turn profitable, according to Arthur Chiao, chairman for Nuvoton and Winbond Electronics.

Panasonic Semiconductor Solutions (PSCS) generated operating losses of JPY23.5 billion (US$216.6 million) in 2018.

Smart management we have at Panasonic :-) One part is cutting development costs, cutting marketing costs and still losing market like mad (I mean financial disaster in form of Panasonic FF mirrrorless cameras).
And another being unable to use their capacity but still keeping all people and expenses have huge losses.

Vitaliy_Kiselev

Panasonic PR

Panasonic Corporation (hereinafter, the "Company") announced that it will transfer (hereinafter, the "Transfer") the semiconductor business mainly operated by Panasonic Semiconductor Solutions Co., Ltd. (hereinafter, "PSCS"), which is a 100% consolidated subsidiary company of Panasonic Equity Management Japan G.K.(hereinafter, "PEMJ"), a 100% consolidated subsidiary company of the Company, to Nuvoton Technology Corporation (hereinafter, "Nuvoton"), a Taiwan-based semiconductor company under the umbrella of Winbond Electronics Corporation group, and enter into the Stock and Asset Transfer Agreement (hereinafter, the "Agreement") with this company. A decision was authorized by the Board resolution today.

Background and Purpose

The semiconductor business of the Company has shifted from the AV area to the automotive and industrial area over the last few years. The Company has positioned the "Sensing" technologies such as image sensors, and the "LiB Application" technologies such as IC for battery management and MOSFET for LiB battery circuits protection as the focus areas, and the Company has aimed to grow its business by consolidating resources in these areas.

In the meantime, in April 2014, the Company transferred the semiconductor wafer production process of the Hokuriku Plants (Uozu, Tonami, Arai) to the joint venture company formed with Tower Semiconductor Ltd., an Israel based foundry company. Furthermore, in June 2014, the Company transferred its semiconductor assembly plants in Singapore, Indonesia and Malaysia to UTAC Manufacturing Services Ltd. (hereinafter, "UTAC") having its headquarter in Hong Kong. The Company has been strengthening its competitiveness by becoming an asset-light company, consolidating and eliminating its offices and production bases in both Japan and overseas for the mitigation of business risks.

However, the competitive environment surrounding the semiconductor business has become extremely severe due to aggressive expansion of competitors, huge investments in the focused area, and industry reorganization through M&A. In such an environment, the Company has come to believe that the even stronger business operation and the continuous investment is critical in order to achieve a sustained growth and expansion of the semiconductor business. Accordingly, it has concluded that the best option would be to transfer the business to Nuvoton, which highly appreciates the Company's accumulated technical and product capabilities and therefore has a potential to lead stable growth by leveraging those capabilities.

About the Transfer

Business restructuring before the Transfer: Just prior to the Transfer, the Company will restructure the semiconductor business as follows.

All shares of Panasonic Industrial Devices Systems and Technology Co., Ltd. (hereinafter, "PIDST") and Panasonic Industrial Devices Engineering Co., Ltd. (hereinafter, "PIDE"), which are wholly-owned subsidiaries of PEMJ, will be handed over to PSCS by way of company split.

The semiconductor business-related intellectual property rights and certain business contracts held by the Company and/or the Company's subsidiaries and the semiconductor business-related assets and debt of the Company will be handed over to PSCS by way of either company split or asset transfer.

All PSCS's shares held by PEMJ will be handed over to a to-be-established, wholly-owned subsidiary of PEMJ (hereinafter, the "PSCS Holding Company") by way of share transfer.

The semiconductor-related components (lead frame) business of PSCS will be handed over to a to-be-established, wholly-owned subsidiary of PEMJ by way of company split.

Details of the Transfer: Upon completion of the business restructuring above, the Transfer will be carried out as per the details below with target effective date of June 1, 2020 (scheduled).

PEMJ will transfer all PSCS Holding Company's shares to Nuvoton.

The business of Panasonic Industrial Devices Semiconductor Asia (an in-house company in charge of development and sales of semiconductors; hereinafter, "PIDSCA") under Panasonic Asia Pacific Pte Ltd. (a Singaporean entity owned by the Company through its subsidiary; hereinafter, "PA") will be handed over to Singapore- based entity owned by Nuvoton.

Certain facilities and inventories attributable to the semiconductor business of Panasonic Semiconductor (Suzhou) Co., Ltd. (hereinafter, "PSCSZ") will be transferred to China-based entity owned by Nuvoton.

Other

The Agreement is based on the precondition of obtaining approvals from the authorities responsible for competition laws and other government agencies of the respective country and region. In addition, the planned date of the Transfer including business restructuring before the Transfer may differ significantly in light of the duration required for completing the procedures for obtaining approval and other procedures concerning permissions etc.

Vitaliy_Kiselev

TowerJazz, the global specialty foundry leader, clarifies following recent press releases in connection with the sale of Panasonic semiconductor business to Nuvoton that it will not sell its TPSCo shares and will maintain its 51% ownership and Board control in TPSCo.

Pursuant to its long-term strategy and growth plans, TowerJazz will continue its operations and manufacturing activity at TPSCo Japanese manufacturing facilities, in accordance with the recently extended contract with PSCS, and do not plan any changes to its foundry services and therefore no impact on the business relationship with its foundry customers.

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