Panasonic plans to dramatically cut back on chipmaking, slashing the business’s 14,000-strong workforce by half and possibly selling some plants

Updated: Thursday October 24, 2013 MYT 7:16:53 AM

Panasonic, which makes chips in M’sia, to slash production worldwide

TOKYO: Panasonic Corp  plans to dramatically cut back on chipmaking, slashing the business’s 14,000-strong workforce by half and possibly selling some plants, the Nikkei said Japanese companies are spinning off their chipmaking operations as profit margins shrink, mainly due to stiff competition from South Korea, the paper said. The move underlines Panasonic President Kazuhiro Tsuga’s determination to weed out weak operations as he focuses on higher-margin products to end years of losses at the consumer electronics conglomerate.Panasonic has chip production plants in Japan’s Toyama and Niigata prefectures, as well as in China, Indonesia, Malaysia and Singapore, the Nikkei said.

The job cut will likely affect mainly foreign plants, the paper said.

Expenses resulting from the workforce reduction are expected to reach 50 billion yen ($514 million) for the year ending March, the paper said, adding the company expects to soften the impact of this through improved earnings.

Panasonic’s chipmaking business reported an operating loss of 184 billion yen in fiscal 2012, the paper said.

The company is in talks to sell some plants to Israeli chip manufacturer TowerJazz <TSEM.TA>, the business daily said.

Reuters reported earlier this month that Osaka-based Panasonic will pull out of its plasma TV business by the end of the financial year.

Panasonic agreed last month to sell the healthcare business to U.S. private equity firm KKR & Co <KKR.N> in a $1.67 billion deal.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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