Thursday, November 28th 2019

Panasonic Exits Silicon Manufacturing Business

Panasonic, an electronics manufacturing giant, has today sold its silicon manufacturing business, marking the end of an era of Japanese semiconductor manufacturing. Once a big player in silicon manufacturing scene, particularly in the '80s and '90s era when Japan's silicon output was huge, Panasonic was considered one of the main players in the silicon manufacturing business. However, due to some difficulties like operating a business with a loss of over $215 million yearly, and having to compete with Chinese and Taiwanese silicon manufacturing firms, Panasonic is selling its silicon production lines.

The subsidiary of Panasonic called "Semiconductors Solutions" is being sold to Nuvoton Technology Corporation, a semiconductor company that spun-off from Winbond Electronics Corporation in 2008, where Winbond still owns 61% stake in Nuvoton despite the spinoff. Additionally, Panasonic forecasts a 27% drop in operating profit for this physical year, with the declining semiconductor manufacturing business counted. The reasoning behind this sale is that the company plans to exit all declining businesses that also include LCD manufacturing, as Chinese alternative manufacturers are stiff competition for Panasonic when it comes to pricing and panel output.
Source: TechXplore via Underfox(Twitter: @Underfox3)
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13 Comments on Panasonic Exits Silicon Manufacturing Business

#1
ZeppMan217
How quaint. I though Panasonic ceased to exist and the brand was sold to some chinese conglomerate?
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#2
Totally
Better question is why are so many exiting when current player can't fab fast enough to meet demand.
Posted on Reply
#3
TheLostSwede
ZeppMan217
How quaint. I though Panasonic ceased to exist and the brand was sold to some chinese conglomerate?
Japanese companies rarely if ever sell to China. Just look at Toshiba memory, the Japanese government blocked the Chinese groups that wanted to bid for it.

Totally
Better question is why are so many exiting when current player can't fab fast enough to meet demand.
A lot of the Japanese companies seem to be doing poorly right now and are apparently selling off everything that isn't making profit, for better or worse...
Posted on Reply
#4
R-T-B
Totally
Better question is why are so many exiting when current player can't fab fast enough to meet demand.
I'm pretty sure Panasonics fabs are old, very big nodes.

ZeppMan217
How quaint. I though Panasonic ceased to exist and the brand was sold to some chinese conglomerate?
Heh, no. Not at all. You are thinking of Sharp I am pretty sure.

It is sad to see Panasonic finally being murdered in LCD land though...
Posted on Reply
#5
notb
ZeppMan217
How quaint. I though Panasonic ceased to exist and the brand was sold to some chinese conglomerate?
131st on this year's Fortune Global 500.

Dell 84th, Intel 135th.
AMD and Nvidia combined would be too small to get on the list.

It's not like you're expected to know what's happening to all large tech companies..., but sometimes it's just better not to write post like yours...
Posted on Reply
#6
R-T-B
notb
AMD and Nvidia combined would be too small to get on the list.
Uh... NVIDIA is rank 250ish something on the list dude. Don't quote me on the exact number, but they are on it and rather high.

EDIT: Meh, global vs nonglobal Fortune 500. nvm. I am dumb.
Posted on Reply
#7
remixedcat
TheLostSwede
Japanese companies rarely if ever sell to China. Just look at Toshiba memory, the Japanese government blocked the Chinese groups that wanted to bid for it.


A lot of the Japanese companies seem to be doing poorly right now and are apparently selling off everything that isn't making profit, for better or worse...
Demographics are the cause of a lot of industry stagnation in Japan. Aging populace can't keep up as easily as younger people. Less people making engineers due to extremely low birth rates. Now they are paying people to have babies because of that.
Posted on Reply
#8
TheLostSwede
remixedcat
Demographics are the cause of a lot of industry stagnation in Japan. Aging populace can't keep up as easily as younger people. Less people making engineers due to extremely low birth rates. Now they are paying people to have babies because of that.
Sure, that's part of it as well, but look at all the "old" consumer electronics giants, they're all suffering one way or another. Toshiba, Sony, Sharp, etc. they've all sold off large chunks of their businesses as they aren't competitive any more. They don't have the same competitive edge any more and they've been playing it safe for too long as well. This wouldn't be the first time this happens though, as the same has happened in a wide range of industries in other nations over 100's of years. As soon as you're not competitive, you're going to start losing business and unless you become competitive again, you're most likely going to go out of business...
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#9
notb
remixedcat
Demographics are the cause of a lot of industry stagnation in Japan. Aging populace can't keep up as easily as younger people. Less people making engineers due to extremely low birth rates. Now they are paying people to have babies because of that.
First of all: Japanese companies are doing pretty well.
Second: the so called "child benefit", that you're likely referring to, is fairly common throughout the developed world: https://en.wikipedia.org/wiki/Child_benefit
And they pay you for raising children, not having them. :)
Posted on Reply
#10
kapone32
I agree with "The Lost Swede" back in the day Sony and Panasonic were the kings of consumer electronics but they were different. It was Cassette players, pre-amps, receivers and turntables. Times have changed though and consumer electronics is now just about all computer based (Toshiba got it and SOny is partly to blame with the PS). The young are more apt to have disposable income to spend on pop culture and we consume content totally different today (Netflix, DAZN, DC Universe, Disney+ etc...). I am sure people still have Home Theaters but that is something you get after the computer (most enthusiasts call them HTPC) instead of back in the day when the computer was what you added.
Posted on Reply
#11
TheLostSwede
notb
First of all: Japanese companies are doing pretty well.
Second: the so called "child benefit", that you're likely referring to, is fairly common throughout the developed world: https://en.wikipedia.org/wiki/Child_benefit
And they pay you for raising children, not having them. :)
I think you misunderstand the issues, Japan and also Taiwan, has negative population growth. As such, the Japanese government has an incentive where they pay couples, cold, hard cash, to make babies. Example below. Even Taiwan is considering implementing similar incentives.
https://qz.com/1646740/japan-wants-to-raise-its-fertility-rate-with-new-perks/

kapone32
I agree with "The Lost Swede" back in the day Sony and Panasonic were the kings of consumer electronics but they were different. It was Cassette players, pre-amps, receivers and turntables. Times have changed though and consumer electronics is now just about all computer based (Toshiba got it and SOny is partly to blame with the PS). The young are more apt to have disposable income to spend on pop culture and we consume content totally different today (Netflix, DAZN, DC Universe, Disney+ etc...). I am sure people still have Home Theaters but that is something you get after the computer (most enthusiasts call them HTPC) instead of back in the day when the computer was what you added.
We're also at a stage where a lot of people want "less stuff" so people limit what they buy in many western countries, which is going to hit some of these companies hard. Other parts of the world hasn't developed as quickly as I think was expected, at least not when it comes to peoples disposable income, so there's only so much market growth. Add to that all the kind integrated devices we have today and it's tough to compete, unless you make some exceptional things. Sony is in my opinion the only really competitive Japanese electronics company today, but at the same time, they're also a fairly pricey, more premium brand.
It's also hard for Japan to compete in terms of price when it comes to Made in Japan products and much of what was one made there is now outsourced to factory in Taiwan, Thailand, Vietnam or Malaysia and maybe to some degree, China.
Add to that the immense competition on one end from Samsung and the other end all the various Chinese brands and you're going to end up at a point where quality products might just not be enough to stay competitive.
The Japanese also a knack making "strange" devices, which costs a lot of money, but have limited appeal. How many of you would want this?
https://www.engadget.com/2019/11/18/sony-immersive-wearable-speaker-hands-on-SRS-WS1/
Posted on Reply
#12
notb
TheLostSwede
I think you misunderstand the issues, Japan and also Taiwan, has negative population growth. As such, the Japanese government has an incentive where they pay couples, cold, hard cash, to make babies. Example below. Even Taiwan is considering implementing similar incentives.
https://qz.com/1646740/japan-wants-to-raise-its-fertility-rate-with-new-perks/
So it's just a particular area, not Japan as a whole. They pay w lump sum for birth. I didn't know about it, but I've heard about similar bonuses in other countries.

In Japan you get ~240 USD monthly for each child under under 16.
So each child will get 46080 USD from the government (possibly more as these benefits usually increase over time). The extra $2800 from the town is nice, but it's not a huge difference in the end.

Again, this is nothing special. Many countries have similar benefits - even those with positive population growth.
Posted on Reply
#13
Vayra86
kapone32
I agree with "The Lost Swede" back in the day Sony and Panasonic were the kings of consumer electronics but they were different. It was Cassette players, pre-amps, receivers and turntables. Times have changed though and consumer electronics is now just about all computer based (Toshiba got it and SOny is partly to blame with the PS). The young are more apt to have disposable income to spend on pop culture and we consume content totally different today (Netflix, DAZN, DC Universe, Disney+ etc...). I am sure people still have Home Theaters but that is something you get after the computer (most enthusiasts call them HTPC) instead of back in the day when the computer was what you added.
I think the main problem is consolidation and demand for basic resources, and then also in production lines. You see it everywhere and the main reason is a huge surge in demand from not only mobile, but simply from global population growth. We're going to be looking at 10B souls pretty soon of which the greatest growth is in lower income groups, that DO have a demand for electronics (esp mobile). And mobile still requires pretty state of the art production lines, even for lower end models.

There is a mismatch between demand in different income groups and the cost of products for those same groups. Any China company can deliver. Japan has little more to offer but lacks capacity. And on top of that, Japanese companies never catered to these new mass markets, but rather to lower volume, higher end ones.
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