It is reported that Sony plans to spin off its semiconductor division, and the proposal from the former "activist shareholder" has finally come true
Sony is considering spinning off its semiconductor business to focus on the entertainment industry. The plan could start as early as this year and may allocate most of the shares to existing shareholders. Despite market volatility and uncertainties brought by Trump's tariff policies, Sony's chip business continues to supply image sensors to smartphone manufacturers like Apple. This division contributed approximately 1.7 trillion yen in revenue last fiscal year but is facing stagnation in growth and competitive pressure
According to informed sources, Sony (SONY.US) is considering spinning off its semiconductor business, marking another significant step for the PlayStation manufacturer in streamlining operations and focusing on the entertainment industry.
The sources indicated that the spin-off plan for Sony Semiconductor Solutions Corp. could start as early as this year. One of the individuals mentioned that Sony is considering distributing most of the equity in the chip business to existing shareholders, retaining only a minority stake after the spin-off.
One of the informed sources pointed out that, given the market volatility triggered by U.S. President Trump's tariff policies, the relevant review is still ongoing, and the final plan may be subject to change.
On Monday, Sony's American Depositary Receipts (ADR) rose 1.24% to $25.28, reaching a new high since March 31. The Tokyo market will be closed on Tuesday due to a Japanese holiday.
In an email, representatives from Sony and its chip business stated, "The report is based on market speculation, and the company has not formulated specific plans."
The Japanese tech giant also plans to spin off its financial business, aligning with billionaire investor Dan Loeb's value release proposal made years ago. Sony had previously rejected reform demands from Loeb's Third Point fund, which fully divested its Sony ADR holdings in 2020.
Sony's chip business provides globally leading image sensors to smartphone manufacturers such as Apple (AAPL.US). Independent operation would grant the business greater decision-making flexibility, allowing for a quicker response to market changes and broader financing channels. Last fiscal year, this division contributed approximately 1.7 trillion yen ($12 billion) in revenue, but it remains unclear whether Sony will fully divest this business.
In recent years, weak global smartphone demand has led to stagnation in this business's growth, and U.S. tariffs have further complicated the industry's outlook. Additionally, Sony's semiconductor business faces declining profit margins, rising costs, and competitive pressure from Chinese chip manufacturers.
For years, the operating profit margin of Sony's Imaging and Sensing Solutions division has steadily declined from around 25% to just above 10%. In contrast, Sony's gaming and music divisions have led profit growth in recent quarters, with operating profits increasing by 37% and 28%, respectively, in the December quarter of last year
