[UncleVanya]

Panasonic Quitting Sensor Making Isn't Totally Good for the Industry

It appears Sony's domination in the sensor business is getting more solid.

[luftfluss]

Panasonic is selling its 49% share of its foundry with TowerJazz, so there may not be much of an actual impact from Panasonic's departure. TowerJazz is the controlling party.

[luftfluss]

I found this:


NEWS ANNOUNCEMENT
FOR IMMEDIATE RELEASE
TowerJazz to Maintain its TPSCo Majority Ownership, Control and Manufacturing Activity
MIGDAL HAEMEK, Israel, and UOZU CITY
,
Japan,
December 02, 2019
–

TowerJazz, the global specialty foundry leader, clarifies following recent press releases in connection with the sale of Panasonic semiconductor business to Nuvoton that it will not sell its TPSCo shares and will maintain its 51% ownership and Board control in TPSCo.

Pursuant to its long-term strategy and growth plans, TowerJazz will continue its operations and manufacturing activity at TPSCoJapanese manufacturing facilities, in accordance with the recently extended contract with PSCS, and do not plan any changes to its foundry services and therefore no impact on the business relationship with its foundry customers

[UncleVanya]

Thank you. That's much more information than the article provided.

[mlt]

Sony fan sites wishful thinking and not checking sources completeness, nice to see TowerJazz quickly putting it to rest

[Mistral75]

Sony fan sites wishful thinking and not checking sources completeness, nice to see TowerJazz quickly putting it to rest

Actually it's Reuters that made a mess when they wrote 'The latest deal includes the sale of the entire JV, which is owned 51% by Tower and 49% by the Panasonic chip unit.' TowerJazz had to react since they are not selling their 51% in this specific JV.

See UPDATE 2-Panasonic to sell its chip unit to Taiwan's Nuvoton for $250 million

[Madaboutpix]

Good to see that, with TowerJazz apparently staying in the game, Sony still has competitors. Monopolies are rarely ever good news for customers.

[Mistral75]

Panasonic won't completely leave the sensor business since they will keep the 'lead frame' business (whatever that means) and their Chinese automotive camera business.



See https://news.panasonic.com/global/press/data/2019/11/en191128-2/en191128-2-1.pdf for further details.

[D1N0]

So how about their Organic sensor tech? They already had a camera with it out: https://www.provideocoalition.com/panasonic-ak-shb810-an-8k-organic-sensor-c...-broadcasting/

[RGlasel]

Panasonic won't completely leave the sensor business since they will keep the 'lead frame' business (whatever that means) and their Chinese automotive camera business.

I'm working on making 100 posts this month, so I will attempt to clarify. Lead frame is like a chip carrier, it is the structure that has connections from the chip die to the external leads on the entire chip "package." Essentially, this means Panasonic will no longer be manufacturing semiconductors, anywhere. The automotive camera business unit will have to source its sensors from outside Panasonic (chances are that this will have no practical effect, the same facilities in China -not all of which were necessarily owned by Panasonic up until now- will be supplying components for and assembling those cameras.


Winbond (which is the parent company of Nuvuton) will be able to diversify into new markets and reduce its exposure to the risk of flucation in demand for the electronic components it currently produces. The Panasonic press release mentions that all of the assets being moved to Nuvoton are first being put in a new Panasonic owned holding company (PSCS Holdings) and PSCS Holdings will be entirely transferred to Nuvoton. Related Panasonic subsidiaries in China and Singapore are being transferred to Nuvoton subsidiaries in those countries, presumably to meet regulatory requirements. There is no mention of a selling price, which to me suggests that Nuvoton will be supplying Panasonic with the very same components that Panasonic used to make themselves. It is only the "paper" assets and liabilities that are changing hands.

[Mistral75]

^ According to Reuters the selling price for the whole deal is $250m.

[RGlasel]

According to Reuters the selling price for the whole deal is $250m.

What makes this confusing is that Reuters originally published its article on Nov. 27 and updated it on Nov. 28 with a comment from Nuvoton that it expected to close the all cash deal in 2020 (but no change to the paragraph about the entire joint venture being sold), Panasonic dated its press release Nov. 28 with no details about sales terms (not even a "terms of sale are not finalized at this time") and on Dec. 2, TowerJazz issues a statement on its website that its share in the joint venture is not being sold to Nuvoton. It should be noted that PSCS (the main part of what Panasonic is "transferring" to Nuvoton) had a 49% interest in the joint venture (TPSCo), not the other way around. When in doubt, I always assume the media got it wrong.

I do think Panasonic will be getting something in return for selling PSCS Holdings to Nuvoton, but it would be in the best interests of both Panasonic and Nuvoton if the "transfer" includes an agreement to keep supplying Panasonic with whatever PSCS was manufacturing (even thought PSCS was losing money for Panasonic, it was still operating) and I can speculate that the terms of that agreement might not allow/enable Panasonic to announce/avoid announcing the financial value of the entire transaction. Or perhaps Panasonic is not obligated to disclose in press releases anything it doesn't want to.

[Mistral75]

As a listed company it's mandatory for Panasonic to publish information that (i) is not secret anymore (some people have begun to talk) and (ii) may have an impact on the stock price.

The sale of their semiconductor business definitely falls into this category; the exact price paid by Nuvoton, not so much: Panasonic have a market capitalisation of $2,500bn, therefore $250m is 1‰ of their market cap.

[RGlasel]

Panasonic have a market capitalisation of $2,500bn, therefore $250m is 1‰ of their market cap.

I can get another post in by pointing out that your ratio of 1% for the Nuvoton deal is correct, but your figure for Panasonic's market cap is wrong. As of this afternoon, Panasonic's market cap is $22.13 billion US, not $2.5 trillion.

[Mistral75]

I can get another post in by pointing out that your ratio of 1% for the Nuvoton deal is correct, but your figure for Panasonic's market cap is wrong. As of this afternoon, Panasonic's market cap is $22.13 billion US, not $2.5 trillion.

Thank you for correcting me. My bad, I shouldn't have written such a post after midnight.

• I wrote 1‰ (one per 1,000), not 1% (one per cent.) but, in doing so, I made a calculation error with the data I had: 250m is 0.1‰ or 0.01% of 2,500bn, not 1‰.
  xxx
• I specifically looked for the market cap in USD and found something like $2,497bn but it seems there was a currency error: it should have been written ¥2,497bn, not $.

Considering you post I went back to basic data: 2,453,053,497 shares issued x ¥1,034 per share (yesterday's closure), that's a market cap of ¥2,536bn or $23.3bn.

So the Nuvoton deal would indeed represent 1% of Panasonic's market cap. This is the kind of amount that is bordering on having a potential impact on stock price.