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November 27, 2013

Panasonic to sell Japan chip facilities to Israel’s TowerJazz

The deal could be concluded in March next year.

By CBR Staff Writer

Panasonic is close to selling three of its domestic semiconductor manufacturing facilities to Israel-based TowerJazz, as part of its efforts to do away with money-losing businesses.

Employing about 2,500 workers, the three chip manufacturing plants have been fully devalued and had a collective book value of $415m (JPY42.2bn) as of 31 March.

Upon the completion of the sale, TowerJazz will assume control over three facilities, while the details on volume of the stake and shift of the factories’ workers is still being discussed.

In addition to sale of Japanese facilities, Panasonic is also in talks with another firm to sell its five abroad chip assembly factories in Indonesia, Malaysia, Singapore, and two in China.

According to Nikkei, the alliance with TowerJazz would offer Panasonic with new capital while boosting the plants’ customer base and enhance production.

Upon sale of all the planned chip plants, in addition to the early retirement offers and transfers to other operations, Panasonic’s semiconductor-segment workforce would be halved to about 7,000 by March 2015.

The Japanese firm is carrying out a massive restructuring to fix up its balance sheet following two consecutive years of record losses.

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