UPDATED 14:31 EST / NOVEMBER 28 2019

panasonic INFRA

Panasonic sells money-losing chip business to Nuvoton in $250M deal

Panasonic Corp. today said that it has inked a $250 million deal to sell its semiconductor business to Nuvoton Technology Corp., a Taiwanese chipmaker that supplies silicon for Dell Technologies Inc. and other major tech firms.

The transaction has several components. Panasonic is offloading its Panasonic Semiconductor Solutions group, the unit’s intellectual property and its 49% stake in a joint venture that operates three Japanese chip fabrication facilities. Nuvoton is also buying out the stake of the joint venture’s other owner, Israel-based Tower Semiconductor Ltd., for an undisclosed sum not included in the deal’s $250 million price tag.

Panasonic Semiconductor Solutions is best known as a maker of power management chips. Its products are used to control the flow of electricity inside mobile devices, electric cars and other systems. The unit also offers a variety of other integrated circuits including image sensors for cameras, though some of those secondary product lines were sold off in a separate deal earlier this year. 

Panasonic has struggled with the intense competition in the chip market. For the fiscal year ended in March, the Japanese electronics giant reported that its semiconductor business lost 23.5 billion yen, or about $215 million, on revenue of 92.2 billion yen.

Even with the losses, the unit’s intellectual property and manufacturing capacity represent a valuable pickup for Nuvoton. The Taiwanese firm makes power management chips and other semiconductors that are used in devices ranging from HP Inc. workstations to Dell servers. Nuvoton operates as a majority-owned subsidiary of Winbond Electronics Corp., another Taiwan-based chipmaker that mainly makes memory products.

As for Panasonic, the deal will advance a cost-cutting initiative the company is currently pursuing in a bid to boost weakened profits. The leadership team is aiming to trim annual expenses by the equivalent of $920 million over the next few quarters through the sale and restructuring of underperforming business units. 

Photo: Pokarin/CC BY-SA 4.0

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