Panasonic to sell chip plant trio in Japan

TowerJazz of Israel interested; factories abroad may also be sold

Kyodo

Panasonic Corp. is in talks to sell off three semiconductor plants in Japan to Israeli chip-maker TowerJazz as part of restructuring efforts to jettison slumping operations, sources said Wednesday.

The major electronics maker will spin off the three plants in Toyama and Niigata prefectures into a new company and sell a majority stake to the Israeli firm, which makes chips on contract, the sources said.

Under the plan, most of the roughly 2,500 employees at the three plants will keep their jobs while some will be transferred to other Panasonic sections, the sources said. The value of the transaction will be determined after fleshing out the details.

Panasonic is also in talks with a Singaporean chip-maker about selling its overseas plants, including factories in China and Indonesia, the sources said.

The company, which has decided to withdraw from the plasma display TV business, now plans to stop producing semiconductors on its own, another slumping business field.

Panasonic wants to concentrate its resources on bolstering fields where it is already strong, such as electronics related to automobiles and housing.

The three domestic plants are engaged in the production of core semiconductor parts used in Panasonic’s digital home appliances. Operating rates at the factories have been sluggish due to weakening demand for such products.

After acquiring its stake, TowerJazz will cultivate new markets while manufacturing semiconductors used in automobiles and industrial machines that will be farmed out by Panasonic, the sources said.

Panasonic may sell the overseas semiconductor plants outright or take the same path as the domestic plants and turn them into a new company in which a majority stake would be sold, the sources said.

The company plans to cut up to 50 percent of the workforce in its semiconductor business, or 7,000 employees, mainly overseas, while its system LSI (large-scale integration) business is set to be merged with that of Fujitsu Ltd. into a new company.