Panasonic Corp said it can afford a deal worth ¥100 billion (US$1 billion) as the maker of electric-car batteries and solar panels looks to expand its automotive and housing businesses.
Acquisitions could include adding a company that can advance its auto technology or an overseas marketing channel for its home-related unit, chief financial officer Hideaki Kawai said on Friday last week. The maker of parts for Tesla Motors Inc’s electric vehicles last month announced a US$460 million deal for a 90 percent stake in an Istanbul-based wiring device maker.
Panasonic, which has eliminated about 71,000 jobs since 2011, is heading toward its first annual profit in three years as president Kazuhiro Tsuga accelerates reform by halting some smartphone and plasma panel operations. The company last month won a contract to supply cells to Tesla’s electric vehicles in a deal that may generate US$7 billion in revenue.
“We’ve improved our financial standing where we can afford an M&A at the ¥100 billion level,” Kawai said in an interview at the company’s Osaka headquarters. “We’ll make a very careful study into any deal, but our financial condition won’t limit us.”
Tsuga, who took the top job in June last year, has said he plans to spend ¥250 billion in restructuring during the two years to March 2015 to end losses from televisions, semiconductors, mobile phones, circuit boards and optical devices.
Reform expenses may exceed the target because the company now faces deteriorating demand for its digital cameras and air-conditioners, Kawai said.
“Our reform has just started,” Kawai said. “Our business environment is changing so rapidly, but our aim of ending losses at unprofitable operations within two years remains the same.”
The company is mulling selling assets, reorganizing offices and increasing outsourcing to revive the five unprofitable operations, Tsuga said on Oct. 31.
Kawai declined to say which plants Panasonic may shut.
In March, Panasonic sold its Tokyo office building for ¥50 billion to a real-estate trust. The electronics maker in September agreed to sell the majority of its stake in a healthcare unit to KKR & Co. The company has also agreed to a partial sale of a logistics unit to Nippon Express Co by the end of the year.
To turn around the TV operation, which may book an operating loss of ¥30 billion or more this financial year, Panasonic will focus on its factory-direct business in the US that sells straight to consumers and bypasses retailers. The TV unit probably will turn profitable by March 2016, it said last month.
While speeding up reforms in consumer electronics, the Japanese electronics maker, which also makes car audio systems and solar panels, plans to boost businesses related to automobiles and housing to double sales of each to ¥2 trillion by 2018.
Earnings in those areas have been “better than we had anticipated,” Kawai said.
The company announced on Oct. 31 it was acquiring a 90 percent stake in the Turkish wiring device maker Viko Elektrik Ve Elektronik Endustri Sanayi Ve Ticaret AS.
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
FACTORY SHIFT: While Taiwan produces most of the world’s AI servers, firms are under pressure to move manufacturing amid geopolitical tensions Lenovo Group Ltd (聯想) started building artificial intelligence (AI) servers in India’s south, the latest boon for the rapidly growing country’s push to become a high-tech powerhouse. The company yesterday said it has started making the large, powerful computers in Pondicherry, southeastern India, moving beyond products such as laptops and smartphones. The Chinese company would also build out its facilities in the Bangalore region, including a research lab with a focus on AI. Lenovo’s plans mark another win for Indian Prime Minister Narendra Modi, who tries to attract more technology investment into the country. While India’s tense relationship with China has suffered setbacks