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Panasonic to shed 7,000 workers in chip business

Kyodo, JIJI

Panasonic Corp. plans to cut up to 50 percent of the workforce in its semiconductor business — 7,000 employees — by March 2015 and sell off some of its factories, sources said Thursday.

Most of the job losses will be overseas, while employees in Japan will be transferred to other businesses, the sources said.

Panasonic has chip-making plants in China, Indonesia, Malaysia and Singapore. It is already in talks with Israel’s Tower Jazz, a manufacturer of integrated circuits, about the sale of overseas facilities.

Panasonic’s semiconductor business has been losing money amid fierce international competition with South Korean and Taiwanese makers, an economic slowdown and sluggish sales of flat-panel TVs.

The company will shift its resources to auto- and housing-related businesses that are expected to see growth down the road, the sources said.

Panasonic may also curtail or even stop making chips at its three mainstay plants in Japan, the sources said. It has already been reported that Panasonic’s system LSI business will be merged with that of Fujitsu Ltd. into a new company.

Panasonic has already implemented an early voluntary retirement program for workers in its domestic semiconductor division and plans to transfer remaining personnel to other divisions, the sources said.

Panasonic is expected to book tens of billions of yen in costs for the personnel cut in the current business year through next March.

The company’s semiconductor business registered sales of ¥184 billion but suffered an operating loss of ¥20.5 billion in fiscal 2012, which ended in March this year.

Suffering an overall net loss of more than ¥750 billion for the second straight year in fiscal 2012, Panasonic is streamlining its unprofitable operations. It has decided to withdraw from plasma TV and smartphone production.

Meanwhile, the electronics giant is in talks to sell the head office building of subsidiary Sanyo Electric Co. in Moriguchi, Osaka Prefecture, sources said Wednesday.

Panasonic is negotiating with the Moriguchi Municipal Government, which is in need of a new headquarters, according to the sources.

The firm aims to sign a deal on the sale within fiscal 2014, which starts next April. The sale price is expected to reach billions of yen.

Panasonic is also promoting the integration or sales of overlapping and redundant operations at Sanyo since making it a wholly owned subsidiary in 2011.

The firm is also believed to be in talks on possible sales of other Sanyo-held buildings and other assets with Kintetsu Real Estate Co. and Towa Pharmaceutical Co.