Sony shuffles structure, creates new semiconductor business

In a bid to focus on its 'key growth drivers', Sony Corporation has scheduled a business structure shake-up, coupled with the creation of the new Sony Semiconductor Solutions Corporation, for April next year.
Written by Asha Barbaschow, Contributor

Sony has announced its intentions to reshuffle its devices division operating structure, establishing a new business, Sony Semiconductor Solutions Corporation, and internally reallocating its battery and storage media business responsibilities.

The Japanese conglomerate said the movement of its devices division was one of a series of measures it is currently implementing to strengthen the segment, as it is a key growth driver for the Sony Group.

"The aim of these measures is to ensure clearly attributable accountability and responsibility from the perspective of shareholders, management policies with an emphasis on sustainable profit generation, and the acceleration of decision-making processes and reinforcement of business competitiveness," Sony said of the split.

"The decision to establish Sony Semiconductor Solutions forms part of this strategy."

Terushi Shimizu, currently Deputy President of Device Solutions Business Group, Sony Corporation, is expected to be appointed President of Sony Semiconductor Solutions; whilst Sony Semiconductor Corporation and Sony LSI Design Inc, which cover Sony's semiconductor manufacturing and design operations respectively, will become subsidiaries of Sony Semiconductor Solutions.

With a primary focus on image sensors, Sony Semiconductor Solutions will also take on research and development, business control, sales, and other operations related to the semiconductor business, which are currently overseen by business groups and R&D units within Sony Corporation.

In the battery business, Sony Energy Devices Corporation will continue integrated business and manufacturing operations, and will be headed by President Yoshito Ezure.

Sony Storage Media and Devices Corporation will pick up storage media business functions from Sony Corporation, with Mitsunobu Saito pinned to stay on as president for that business.

Sony said the integration of business functions and manufacturing operations will ensure a continued, stable profit generator.

"The aim of this new structure is to enable each of the three main businesses within this segment to more rapidly adapt to their respective changing market environments and generate sustained growth," Sony said.

Completion of these transfers has been scheduled for April 2016.

Last month, Sony's CEO Kazuo Hirai said that his company was not ruling out entering the automotive market, and that he was open to the possibility of rolling out a vehicle in partnership with a traditional carmaker, saying the advent of electric cars has lowered entry barriers for new players.

"If we fundamentally believe at some point in time that we can make a difference in the automotive space, it's something that we will look at," Hirai said at the time. "We don't have plans at this point but never say never," he added.

Last year, the tech giant closed 20 of its bricks and mortar stores in the US, resulting in approximately 1,000 staff layoffs nationwide, and announced the slashing of 2,100 jobs from its struggling mobile communications segment by March 2016, after it became clear that Sony's mobile unit was in trouble with financial losses

Earlier this year, there was talk that Sony may leave the smartphone and TV market as it eyed a forecast profit spike in other areas of its business, with Hirai saying his company would no longer pursue sales growth in divisions where it has suffered heavy competition, such as smartphones.

Sony's Xperia Z5 Premium handset, however, is scheduled for rollout next month.

In May, Sony acquired Optical Archive Inc, a company founded last year by Frank Frankovsky, Facebook's former vice president of hardware design and supply chain optimisation.

The company also suffered a major online attack when its Sony Pictures movie-making division was hit by a massive cyber attack that crippled its networks, as well as allowing the attackers to make off with terabytes of data including email inboxes and confidential memos. The hack, which was blamed on North Korea, cost the division at least $15 million as of February 2015.

Sony's division split follows the likes of PC maker Hewlett-Packard, which will split into two separate entities, HP Inc and HP Enterprise, by the end of this year.

The split remains on track to occur by November, with both HP Inc and HP Enterprise to operate as independent, publicly traded companies, but, as part of the separation, HP Enterprise will cut 25,000 to 30,000 jobs, and bet big on the private and hybrid cloud.

Another notable tech giant split this year was Google. In August, Google filed plans with the US Securities and Exchange Commission for a new public holding company, Alphabet, of which Google is now a wholly-owned subsidiary.

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