Panasonic, a Japanese electronics manufacturer, is giving up its chip-making business. It is going to transfer all of its shares to Nuvoton, which is a Taiwanese semiconductor business, and withdraw completely. It has been 67 years since the Dutch company began making semiconductors by bringing in Philips Technology, a Dutch company, in 1952.
According to Reuters, the Japanese company is planning to hand over its 49 percent stake in Panasonic and Tower Jazz. As well as Panasonic Solution, a chip-making subsidiary based in Nagaoka-kyo, Japan.
Panasonic loss to South Korean chip-making companies
Back then, Panasonic first started its chip-making business to produce home appliances. Then it grew to be one of the top 10 semiconductor companies in the world by sales in the 1990s. However, its business started to decline as sales of home appliances such as TVs and digital cameras decreased. And it lost ground in competition with South Korean and Taiwanese companies.
Now, South Korean companies such as LG and Samsung Electronics reign the world’s home appliances market.
In 2014, the company switched its three plants in Toyama and Niigata prefectures to co-operate with Tower Jazz as their performance deteriorated and factory operating rates fell. The plants in Okayama and Kagoshima prefectures were shut down, but they failed to escape operating losses.
Panasonic sold part of its chip-making business to Japanese chipmaker Rom in April. Including diodes for home appliances aiming to turn a surplus. However, it eventually decided to give up its business as demands for chips decreased due to the slowing global economy.
In Panasonic’s decision, Kazuhiro’s policy of “unconditionally abandoning the deficit business” also affected. Panasonic previously announced on the 21st that it will stop producing liquid crystal panels that do not make profits.
Panasonic focused its business capacity from TV panels for medical devices and cars in 2016 to liquid crystal panels for medical devices and automobiles, but it decided to pull out of the business as it continued to suffer losses. Panasonic’s operating profit in 2019 (April 19-2020) is expected to be just 300 billion yen, down 27 percent from last year.
