Panasonic to sell stakes in chip plants to Israel's Tower

December 20, 2013
Panasonic introduces its new tablet personal computer 'Toughpad 4K UT-MB5' at a press conference in Tokyo on September 6, 2013

Japan's Panasonic on Friday announced plans to sell majority stakes in its three domestic semiconductor plants to an Israeli chipmaker in a bid to reduce its loss-making operations.

The electronics giant will jointly set up a new firm with Tower Semiconductor to run Panasonic's three plants—Uozu, Tonami and Arai—starting in April next year, Panasonic said in a statement after markets closed Friday.

The new firm will be owned 51 percent by the Israeli company, known for its "TowerJazz" brand, and the remaining 49 percent by Panasonic.

Separately, Panasonic said it would close another domestic chip plant in Okayama, western Japan, in March next year.

"But we have no plan to lay off our employees following the latest change in our businesses," a company spokeswoman said. Panasonic is undergoing a huge restructuring aimed at repairing its balance sheet after two consecutive years of record losses.

It suffered a 20.5 billion operating loss in semiconductor businesses for the year to March 2013.

It has already decided to pull out of the consumer smartphone business in Japan and plasma televisions.

The firm recently doubled its net profit forecast for the current fiscal year through March to 100 billion yen ($985 million).

Panasonic displays its Viera LCD and OLED 4K television sets at the Ceatec electronics trade show in Chiba, Tokyo on October 1, 2013

Panasonic shares rose 0.16 percent to 1,215 yen on Friday.

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