Nuvoton to acquire the chip-making business of Panasonic Corporation

Panasonic, a renowned Japanese electronics corporation, reportedly announced that it would sell its chip-making business, Panasonic Semiconductor Solutions, to Taiwanese semiconductor company, Nuvoton Technology. With this move, Panasonic is leaving a sector that if first entered in 1952, parting with a business arm that is currently in a huge loss.
The ongoing U.S. China trade war is having a detrimental impact on the chip-manufacturing industry. Panasonic semiconductor business was ranked among the top 10 chip producers in the world in terms of sales in 1990. The chip unit currently handles production, development and sales.
Additionally, the company would also part with its three Japanese chipmaking plants that come under TowerJazz Panasonic Semiconductor. The facilities were set up as part of a joint venture with Israel-based Tower Semiconductor.
Panasonic Semiconductor had incurred a loss of $215 million (23.5 billion yen) for the financial year that ended in March over the sales of 92.2 billion yen. Making profit in the semiconductor business in that financial year was top priority for the company. However, the company decided to sell the business as the trade war negatively impacted product demand.
Panasonic forecasts a drop of 27% in its operating profit to approximately 300 billion yen in this financial year. The company further plans to sell its liquid crystal display venture in 2021. This move is part of a bigger campaign for the company to eliminate loss-making operations.
Japanese companies were leading the globalsemiconductor market, ruling over 49% of the total market share back in 1990. However, slow decision-making on consolidation and investment has left these companies trailing behind its Taiwanese and South Korean rivals.
Reports cite, the combined market share of Japanese semiconductor firms dropped to 7% last year. Also, no Japanese company was ranked among the top 10 manufacturers in world.
Amid all the losses, Panasonic hopes to rise higher in revenue.It recently unveiled its facial recognition APIwith an aim to gain profits from the new business.
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