Panasonic to sell its chip business to Taiwanese company

The company has, over some time now, been divesting certain business units and shifted some of its manufacturing units to its joint venture with Tower Semiconductor. As some of you might remember, the company transferred its semiconductor assembly plants in Singapore, Indonesia and Malaysia to UTAC Manufacturing Services back in 2014. This sale to Nuvoton will include the joint venture, owned 51% by Tower and 49% by the Panasonic chip unit. Panasonic says it 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 reorganisation through mergers and acquisitions. In light of this, the company has reached the conclusion that having a stronger business operations, backed by continues investments is critical in order to achieve a sustained growth and expansion of the semiconductor business. Therefore, Panasonic believes that it is the best option to transfer the business to Nuvoton; which is said to have the potential to lead stable growth by leveraging those capabilities, the Japanese company writes in a press release Included in this transfer is the business of Panasonic Industrial Devices Semiconductor Asia, an in-house company in charge of development and sales of semiconductors. This business will be handed over to a Singapore-based entity owned by Nuvoton. Certain facilities and inventories connected to the semiconductor business of Panasonic Semiconductor (Suzhou) will be transferred to a China-based entity owned by Nuvoton. Nuvoton says in its own press release that the addition of Panasonic Semiconductor Solutions will increase its presence in the global semiconductor industry through greater scale and volume of semiconductor solutions. It will also strengthen the company’s technology platform via deeper R&D resources and a broader intellectual property portfolio. Additional to this, Nuvoton sees the possibility to capture growth trends in the electrification and automation of automotive and industrial field with the added muscles that Panasonic’s semiconductor business brings. The transaction is expected to close by June 2020