Sanyo Electric Co, the world’s largest maker of rechargeable batteries, will trim its money-losing semiconductor unit’s operations to help the company meet its three-year profit target.
The company will also reduce the size of its units making electronics devices such as optical pickups, company president Seiichiro Sano said in an interview in Tokyo yesterday, without providing a timeframe and size of the cutbacks.
The chip division may make a profit of ¥10 billion (US$99 million) in the year ending March 2011, he said.
Under a three-year plan announced in May, the Osaka-based company is focusing on lithium-ion and solar batteries as growth drivers. After scrapping plans to sell the chip unit last year, Sanyo is reorganizing the division to turn it profitable as weaker demand depresses prices.
“Since around the end of last year, demand for electronic devices has been slowing,” Sano said. “For the semiconductor operations, we may have to stop making new kinds of chips and cut the number of types we make.”
Sanyo is keeping its target for group operating profit unchanged at ¥50 billion for the year ending March 31. The chip unit, Sanyo Semiconductor Co, is expected to be profitable in the second half, Sano said.
Under a three-year business plan announced in May, the company is targeting operating profit of as much as ¥100 billion for the year ending March 2011.
Sanyo scrapped plans in October last year to sell its chip division because it couldn’t get an “appropriate” sale price.
The semiconductor unit, spun off from the parent in July 2006, makes chips for audio, visual and telecommunications equipment.
Sanyo has received no indication that Goldman Sachs Group Inc, Sumitomo Mitsui Financial Group Inc or Daiwa Securities SMBC Co intend to sell their preferred shares, Sano said.
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