Panasonic Leaves Chipmaking Industry, Bids To Nuvoton Tech

Recently, Panasonic stated plans of selling its loss-making semiconductor unit to Taiwan’s Nuvoton Technology Corp.

The auction will be for $250 million. It happened after the Japanese electronics giant grapples with elevating its profit amid a lack of growth drivers.

Moreover, it is part of Panasonic’s plans to cut fixed costs by 100 billion yen ($920 million) by the year ending in March 2022.

They will be doing it by strengthening production sites and revamping loss-making businesses.

Meanwhile, Panasonic indicated it has already separated most of its chip business as it lost to several nimble Korean and Taiwanese rivals.

It is also thinking of shutting down or shifting its manufacturing facilities to its joint endeavor with Israel’s Tower Semiconductor.

The firm’s semiconductor unit is currently focusing on designing power-management chips and sensors for smartphones, cars, and security cameras.

This month, it has sold part of the power management chip business to Japan’s Rohm Co.

The latest deal incorporates the sale of the entire Joint Venture. It has 51% ownership by Tower and 49% by the Panasonic chip unit.

Significant Effect On Panasonic’s Earnings

On the other side, the Joint Venture manages three Japanese chipmaking facilities.

Panasonic has also indicated that the sale will not have any substantial impact on its earnings.

The value of the agreement that the company has declared excludes the amount Nuvoton would pay for Tower Semiconductor’s share in the joint venture.

Way back 2008, Nuvoton was spun off from Winbond Electronics Corp on supplying chips for electronic devices containing computers and audio products.

However, Panasonic has turned its focus away from low-margin consumer electronics. The firm now bet on industries that sell to automakers.

The companies were such as factory-owners and firms that program processes.

Elsewhere, Panasonic, who is in collaboration with Tesla for Gigafactory 1, denies any project. Panasonic will now not be part of Tesla on the forecasted Gigafactory 3 battery production.

As of now, Panasonic has the only authority to provide battery cells for Tesla’s vehicles. Things are shifting these days quickly.

Since Tesla’s launch, Panasonic has always been the automaker for sole battery dealers on vehicles with very little exception. It is also for the ones which are short-lived Tesla Roadster 3.0 battery substitution program.