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Panasonic Said in Talks to Sell Three Chip Plants to TowerJazz

Panasonic Headquarters
A man rides a bicycle past the Panasonic Corp. headquarters in Kadoma, Osaka Prefecture, Japan. Photographer: Tomohiro Ohsumi/Bloomberg

Nov. 27 (Bloomberg) -- Panasonic Corp. is in talks to sell majority stakes in three chip factories in Japan to Israel’s Tower Semiconductor Ltd., according to a person familiar with the matter.

The plants are likely worth more than 10 billion yen ($99 million), and a final decision may come as soon as next month, the person said, asking to not be identified because the talks are continuing. Most of the 2,500 workers at the factories will move to Tower, while the rest will switch to other roles at Panasonic, the person said.

President Kazuhiro Tsuga is seeking alliances for the Osaka-based company’s chip business as he continues restructuring its consumer-electronics units, including ending production of plasma televisions. The company plans to cut as many as 7,000 workers in the semiconductor business, or about half of the staff, as it considers outside investment in overseas plants in China, Indonesia and Malaysia, the person said.

Panasonic last month doubled its full-year profit forecast to 100 billion yen after benefiting from a weak yen and boosting sales of its batteries for electric cars.

Hitomi Ishikawa, a spokeswoman for Panasonic in Tokyo, said the company is considering options for its semiconductor units and nothing has been decided.

The public relations office of Tower Semiconductor in Migdal Haemek, Israel, wasn’t available to respond outside normal business hours. Shoko Saimiya, a spokeswoman for TowerJazz, the company’s brand in Japan, wasn’t available for comment.

Panasonic shares rose 3.7 percent to 1,170 yen in Tokyo trading at the midday break, extending their gains to 124 percent this year.

Nikkei reported Panasonic’s plans to sell the plants earlier today.

To contact the reporter on this story: Grace Huang in Tokyo at xhuang66@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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