Panasonic Considering Halving Chip Operation Workforce

Osaka, Oct. 24 (Jiji Press)--Panasonic Corp. <6752> is considering halving the number of workers in its semiconductor operations in Japan and abroad from the current some 14,000 by fiscal 2014 starting next April, informed sources said Thursday. The major Japanese electronics maker seems to have launched negotiations to sell part of its chipmaking plants with foreign companies, the sources said. By finishing restructuring the semiconductor division, the second largest loss-making segment for the company after the flat-panel television business, Panasonic aims to further reinforce operations in its two key growth fields of automobile and housing equipment, they said. Panasonic has its main domestic semiconductor plants in Toyama and Niigata Prefectures and overseas plants in China, Indonesia, Malaysia and Singapore. The company is believed to have entered talks with companies including Israeli chip contract manufacturer Tower Semiconductor Ltd., known with the TowarJazz brand, to sell some of the plants, the sources said. Panasonic has already implemented an early voluntary retirement program for domestic workers at its semiconductor division, planning to transfer remaining personnel to other divisions, the sources said. Japanese semiconductor operations have seen earnings deteriorate sharply due to severe competition with South Korean and Taiwanese makers, an economic slowdown and sluggish sales of flat-panel TVs. Panasonic's semiconductor business earned sales of 184 billion yen but suffered an operating loss of 20.5 billion yen in fiscal 2012 that ended in March this year. Suffering an overall net loss of over 750 billion yen for the second straight year in fiscal 2012, Panasonic is streamlining its unprofitable operations. It has decided to withdraw from plasma TV and smartphone production. In February this year, Panasonic agreed with Fujitsu Ltd. <6702> to integrate their operations for system-on-chip products. END