Sony Considers Divesting Israeli Chip Unit Amid Strategy Shift

The Israeli semiconductor division of Sony Group is under evaluation for sale by Sony Semiconductor Israel because the company wants to shift its focus toward entertainment according to sources with knowledge of the situation. The cellular chipsets division of the company produces annual recurring revenue of $80 million and potential buyers could acquire it for approximately $300 million according to sources.

The Japanese conglomerate has hired investment bankers to lead the process which is currently in its initial phase. Private equity firms together with semiconductor companies are expected to show interest in the matter although Sony has not made any official statements.

Sony purchased the business under the name Altair Semiconductor in 2016 for $212 million. The company produces chipsets that operate wearables and smart meters and home appliances.

The planned divestiture represents another strategic move by Sony to refocus its business operations. The company generates more than 60% of its profits from gaming music and film activities and plans to spin off its financial services arm partially during this year. Sony announced in April that it was considering multiple options for its chip business including partnership opportunities and moving toward a fab-light model to decrease capital requirements.

The company maintains its position as a worldwide leader in image sensors because of increasing smartphone and automotive industry demand. The company has shifted its focus toward content-driven segments because it has decided to exit mobile connectivity chipsets production.